Criminal activity in northern Mexico threatens to undermine an ongoing effort to open the country to foreign oil and gas producers for the first time in decades, a new report from Rice University’s Baker Institute warns.

The report comes as Mexico hammers out the details of constitutional changes approved last year that soon will allow foreign energy companies to bid on access to the country’s oil and gas resources, which for decades have been controlled exclusively by the state-run monopoly Petróleos Mexicanos, or Pemex.

But the new report says criminal activity by drug cartels and others could deter some foreign companies from pursuing opportunities in Mexico despite its potential bounty and may prevent the country from profiting as much as it hopes to from the energy overhaul.

“These companies - they’re smart people, they’ll ask questions, and they’ll make their calculations,” said Tony Payan, author of the report and director of the Baker Institute’s Mexico Center. If Mexico isn’t able to convince companies it’s safe, Payan warned, “there may be lost opportunities for investment.”

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