Mexico’s incoming leftist president, Andres Manuel Lopez Obrador, said an oil reform that allowed for the sale of oil rights to private investors will not continue during his term, according to an interview published on Nov. 30.
Lopez Obrador, who takes office on Dec. 1, told the left-leaning daily La Jornada that the landmark energy overhaul passed by outgoing President Enrique Pena Nieto had been “a big scam” and that he would focus on boosting state investment.
“They stopped investing, assuming that foreign investment was going to arrive and that public investment was not going to be required. Foreign investment did not come; that was a big scam,” Lopez Obrador said.
“The energy plan designed in the neoliberal period is not going to be carried out,” he said, and added “there will be no more rounds,” suggesting his administration would end the process of auctioning oil fields to private companies.
However, he did not give details. In the past he has said that private auctions were suspended until more than 100 oil contracts issued by the outgoing government had been reviewed for signs of corruption.
Lopez Obrador has pledged to boost investment in state-run oil company Pemex and plans to start building a new oil refinery next year in his home state of Tabasco.
Mexican financial markets have been rattled since Lopez Obrador said he would scrap a partly built new Mexico City airport and members of his party proposed unexpected bills to cut bank fees and limit mining rights.
Earlier this month, ratings agency Fitch revised its outlook on Mexico’s debt to negative, citing the uncertainty caused by the airport cancellation as well the risks from rising debt at Pemex.
Lopez Obrador told La Jornada that he aimed to boost crude production to 2.4 million barrels per day (MMbbl/d) by the end of his term in 2024. Previously he had targeted 2.6 MMbbl/d.
He said he expects Mexico’s decline in oil output to hit bottom next year at about 1.5 MMbbl/d.
Cairn Oil & Gas will drill about 300 development/injection wells and construct 205 well pads to increase production from the Barmer fields.
Drillers cut nine oil rigs in the week to March 22, bringing the total count down to 824, the lowest since April 2018, Baker Hughes, a GE company (NYSE: BHGE), said in its weekly report.
The independent U.S. energy producer aims to take a final investment decision on the $20 billion project in the coming months, having signed up long-term buyers for its LNG.