Page 4 - LatAmOil Week 03 2021

LatAmOil COMMENTARY LatAmOil

Biden and Lopez Obrador met in 2012 (Photo: Especial)

Sore spots in US-Mexico

energy relationship

Biden takes office in the face of US concerns about competition in Mexico – and a

Mexican leader’s determination to uphold his own preference for state-owned companies

ON his first day in office, incoming US Presi- the interests of US oil and gas companies in
dent Joe Biden signed executive orders cancel- other arenas – namely, in Mexico.
WHAT: ling the permit that his predecessor issued for
Biden is expected in the Keystone XL oil pipeline and recommitting Presidential priorities
some quarters to defend Washington to the Paris Agreement on climate Those interests are currently at risk because of
US oil and gas interests change. Then on his second day in office, he the stances taken by Mexico’s President Andres
more vigorously than his signed another executive order putting a 60-day Manuel Lopez Obrador.
predecessor. hold on the issuance of new leases for federal The Mexican leader has in recent months
lands and waters for the purpose of fossil fuel directed his administration to take every step
WHY: extraction. According to press reports and the possible within the bounds of law to ensure that
Trump is perceived to Biden campaign’s previous statements, more Pemex, the national oil company (NOC), retains
have looked the other executive orders along similar lines are expected its leading position within the domestic hydro-
way while Lopez Obrador to follow in the near future, in line with the new carbon industry. In so doing, he has upheld his
favoured Pemex and
discouraged competition. president’s position on environmental issues. own preferences for state-owned enterprises,
In other words, these policy decisions are not which he sees as the natural and rightful leaders
WHAT NEXT: exactly coming out of the blue. It seems reason- of the country’s energy sector. But he has also
Biden is likely to be more able to conclude, then, that Biden is not inclined run up against the body of law that encourages
focused on domestic pri- to favour the fossil fuel industry. competition and creates openings for private
orities in the near term. Nevertheless, there may be some limits Mexican firms and international oil companies
to this lack of favour. Industry observers are (IOCs) to invest in upstream, midstream and
expecting the new administration to champion downstream projects.

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