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XOM and SLB – Your Best Ways to Play a Mexico Oil Boom

Mexico took the first steps to unlock its oily bounty. Play the opportunity with Exxon & Schlumberger

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SLB & XOM – Two Of The Best

For investors looking to cash in the opportunity in Mexico, two of the best plays are industry stalwarts Exxon Mobil (XOM) and Schlumberger (SLB). The key is the oil stocks already big positions in helping PEMEX.

XOM already is a huge player in the U.S. waters of Gulf of Mexico. However, Exxon is quickly becoming a big player just cross the border. The integrated giants drilling technology is some of the best in the world— thanks to its purchase of natural gas giant XTO for $41 billion in 2009 — and it’s been partnering with PEMEX on technology swaps.

Back in August, XOM signed a five-year technical agreement that will see Exxon and PEMEX collaborate on drilling technology and human-resources training. While the agreement is “non-commercial” in nature, it’s still a big win for E&P giant. It basically shows Mexico just what XOM is capable of. That should provide XOM with the opportunity to get it hands on Mexico’s oil and gas, both onshore and off.

Not to mention that XOM’s deep pockets should help out muscle smaller players as land leases go up for auction. All in all, the venerable oil play should be one of the best ways to gain access to Mexico’s bounty from an E&P stand point.

And speaking of needed technology, Schlumberger has it in spades- especially the kind Mexico needs.

As the international king of fracking over rival Halliburton (HAL), SLB has already made headway in Mexico’s energy markets with technology deals with PEMEX. After the first round of energy reform took place back in 2009, SLB was one of the first firms to partner with PEMEX on enhanced oil recovery and is one of the major reasons why energy production in the nation hasn’t fallen further.

With early drafts on reforms predicting that PEMEX will still control about 70% of each oil well, its preference for SLB technology could still carry over into the future. With plenty of land still variable to drill, SLB’s pockets could get very fat indeed.

The bottom line is Mexico is finally taking the necessary steps to unlock its energy bounty and both XOM & SLB could be the top plays in the nation.

Disclosure: None

Article printed from InvestorPlace Media,

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