Mexico’s president on March 22 defended his decision to open the energy sector against attacks from the man currently favoured to succeed him, saying a rollback of the measure could cost the country billions of dollars in lost investment.
The 2013-2014 legislative overhaul that ended state oil firm Pemex’s decades-long monopoly was the centerpiece of President Enrique Pena Nieto’s economic agenda, and leftist Andres Manuel Lopez Obrador, who is leading polls for the July 1 presidential election, has threatened to unpick it.
Speaking in the oil-rich state of Veracruz, Pena Nieto said those calling to walk back the reform risked condemning Mexico to an “obsolete” economic model, without naming Lopez Obrador.
“To cancel the energy reform is practically to make disappear the investments that today require certainty,” Pena Nieto said at the inauguration of a technology center.
“We want ... the private sector to invest, for it to generate returns for Mexico and its people,” he added.
Pena Nieto said over 800,000 jobs and $200 billion worth of investment ultimately depended on the energy reform’s success.
He is barred by law from seeking re-election.
Lopez Obrador has pledged to review the oil and gas contracts awarded under Pena Nieto’s government if elected, and on Wednesday evening said his administration would consider unwinding the energy reform legislatively.
Pena Nieto’s reform changed the constitution to grant private operators oil and gas exploration and production rights in a bid to reverse years of declining crude output.
However, the reform coincided with a sharp decline in oil prices, and the government has said it will take time for the shake-up of the energy sector to bear fruit.
Pledging to reduce Mexico’s dependence on policies “sent from abroad”, Lopez Obrador has attacked Pena Nieto’s economic agenda on the grounds that corruption is widespread.
Corruption scandals, lackluster growth and rising violence have battered the government’s reputation.
Later on March 22, Energy Minister Pedro Joaquin Coldwell told local radio that to undo the energy reform would be “extremely harmful,” and would make Mexico more dependent on natural gas imports, and deny it major tax revenues.
Joaquin Coldwell noted the only body authorized to revoke oil and gas contracts - provided serious violations are shown to have occurred - is the industry regulator, the National Hydrocarbons Commission, not the president.
Recommended Reading
NOV Announces $1B Repurchase Program, Ups Dividend
2024-04-26 - NOV expects to increase its quarterly cash dividend on its common stock by 50% to $0.075 per share from $0.05 per share.
Repsol to Drop Marcellus Rig in June
2024-04-26 - Spain’s Repsol plans to drop its Marcellus Shale rig in June and reduce capex in the play due to the current U.S. gas price environment, CEO Josu Jon Imaz told analysts during a quarterly webcast.
US Drillers Cut Most Oil Rigs in a Week Since November
2024-04-26 - The number of oil rigs fell by five to 506 this week, while gas rigs fell by one to 105, their lowest since December 2021.
CNX, Appalachia Peers Defer Completions as NatGas Prices Languish
2024-04-25 - Henry Hub blues: CNX Resources and other Appalachia producers are slashing production and deferring well completions as natural gas spot prices hover near record lows.
Chevron’s Tengiz Oil Field Operations Start Up in Kazakhstan
2024-04-25 - The final phase of Chevron’s project will produce about 260,000 bbl/d.