Page 9 - NorthAmOil Week 19 2021

NorthAmOil POLICY NorthAmOil

Mexican President
Andres Manuel Lopez
Obrador has come
under fire from the API.

API blasts AMLO for amending

oil and power laws

US-MEXICO MEXICAN President Andres Manuel Lopez trade deal ought to be a top priority.
Obrador has come under fire from an influential Sommers also drew attention to the obstacles
US industry association for his efforts to ensure that US companies faced in Mexico with respect
that state-owned companies continue to domi- to obtaining permits. For example, Mexico’s
nate the domestic energy sector. Energy Regulatory Commission (CRE) often
In a letter sent to several high-ranking US “prolongs administrative processes for permits
officials, the American Petroleum Institute (API) to transfer legal ownership that are by regulation
criticised the Mexican government’s policy of required to be granted within 90 days,” he said.
giving preference to public-sector organisations “Moreover, CRE also requests additional infor-
such as Pemex, the national oil company (NOC), mation to issue the permits that is not required
and the Federal Electricity Commission (CFE). in the regulations, until the point of denying
This policy has become part of Mexico’s legal such permits to the companies, after several
regime following the presidential administra- delays.”
tion’s successes in amending the Power Industry Likewise, he wrote, the Consumer Protection Sommers also
Law and the Hydrocarbons Law last month, it Bureau, known as PROFECO, often enforces
noted. regulations in an idiosyncratic fashion. For drew attention to
The API argued in its letter – which was sent example, he said, PROFECO typically exempts
to Secretary of State Antony Blinken, Secre- Pemex’s downstream units from compliance the obstacles that
tary of Energy Jennifer Granholm, Secretary of with emissions standards upon request, while
Commerce Gina Raimondo and US Trade Rep- insisting that US-based filling station operators US companies
resentative Katherine Tai – that the amendments (some of which are members of API) meet every faced in Mexico
to these laws were causing investors to lose con- requirement.
fidence in Mexico. It also alleged that Mexico These bureaucratic actions may also violate with respect
City’s actions contravened the US-Mexico-Can- the provisions of USMCA, he added.
ada Agreement (USMCA), which took effect last As of press time, the Mexican government to obtaining
year, replacing the North American Free Trade had not responded publicly to the API’s let-
Agreement (NAFTA). ter. Mexico City has yet to begin enforcing the permits.
“The common denominator of both laws is amendments referenced in that document, as
to hinder new private investment in the energy they face legal challenges. The country’s Supreme
sector as well as destroy the value of already Court is examining the new laws to determine
operating private assets in violation of Mexi- whether they are in line with the Mexican consti-
co’s commitments under USMCA,” the group’s tution, and on May 7 it granted a provisional sus-
CEO, Mike Sommers, wrote. He requested that pension of the amendment to the Hydrocarbons
Tai address these matters at an upcoming meet- Law. It took this step in response to the filing of
ing with Mexican Economy Minister Tatiana a lawsuit by five privately owned oil companies
Clouthier, saying that “these violations” of the working in Mexico’s oil and gas sector.™

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