President Enrique Pena Nieto signed a controversial law that opens Mexico's oil industry to foreign investment for the first time in 75 years.
The bill, which modifies three articles of Mexico's constitution, is aimed at attracting foreign investment with profit and production sharing contracts.
The measure breaks a monopoly that the state oil company, Petroleos Mexicanos (Pemex), has held since 1938.
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This is "one of the most transcendent bills in the past half-century," Pena Nieto said, arguing that it has the potential to lead to fast economic growth and create jobs for Mexican engineers and technicians.
It will also lead to a drop in the price of natural gas and electricity, and an increase in food production because a strong petrochemical industry will produce more affordable fertiliser, Pena Nieto said.
The president signed the measure into law after it was approved in Congress and after it was ratified by a majority of Mexican states.
Oil output has dropped from 3.4 million barrels per day in 2004 to 2.5 million today because of what the bill's supporters say is underinvestment. Mexico currently imports half the gasoline it consumes.
The government hopes to use foreign and local investment to reverse that trend, increase production, expand refining capacity and drill for shale gas and deep-water oil deposits.
The reforms met few obstacles in the Congress and state legislature because it was supported by two of the country's three leading parties, the ruling Institutional Revolutionary Party (PRI) and the conservative National Action Party (PAN).
But the third party, the leftist Party of the Democratic Revolution (PRD), slammed the legislation a national betrayal.
Many in Mexico look back with pride at the expulsions of foreign companies in 1938 by president Lazaro Cardenas, who died 43 years ago to the day yesterday.
One of the PRD's founders is the ex-president's son, Cuauhtemoc Cardenas.
The party has called for a massive protest against the measure for January 31.
