Mexican President Enrique Pena Nieto
Mexican President Enrique Pena Nieto gives a speech during a proposal for energy reforms at Los Pinos presidential residence in Mexico City. (Reuters)

The legislation allowing private companies to invest in Mexico was vigorously opposed, with a congressman stripping to his underwear, but finally the bill did pass the house. But for American companies and the Canadians, it's an early Christmas gift.

By opening up the private sector, it would be right to say that Mexico, along with the US and Canada, can go on to become a strong oil-rich nation together; a new potential 'persian gulf' for oil. The new energy legislation gives private oil and gas companies the permission to drill for oil and gas with the state-run firm Pemex, in exchange for a share of the profits.

A liberalisation of the 75-year old legal restrictions promises to boost Mexico's economy and wealth, and it will put North America on the map among the oil wealthy nations. Mexico at present has 60 billion to 120 billion barrels in the deep-water Gulf, shale and other deposits, but much has gone untapped and under-utilised, primarily owing to the lack of advanced machinary and funds.

The easiest assess for tapping the crude oil market in Mexico is with the Canadians and the Americans, simply owing to their proximity. For the US, which is the largest importer of Mexican crude oil, the opportunity to directly tap from the source would prove to be cost effective. There are already several oil companies lining up to do business with Mexico.

While the bill has passed with a 354 against 134 majority, the Opposition parties have been raising fear of being exploited by the US. The fear of the Mexicans of US domination over Mexico's oil, which was largely so before 1938, is not altogether unfounded. Congressman Antonio Garcia Conejo of the Democratic Revolution Party stripped down to his underwear and said "This is how you're stripping the nation. Where is the benefit?"

Amidst the concerns and fear, there is still much to cheer, especially as Mexico moves towards a new economic boom that will be mainly driven by US and Canada. The country is looking at an additional foreign investment a year of about USD 20 Billion. It is certainly going to be a Merry Christmas for US and Canada; and a happy New Year for Mexico.