Page 12 - LatAmOil Week 39

LatAmOil MEXICO LatAmOil

Mexico may reverse energy

liberalisation, president says

MEXICAN President Andres Manuel Lopez Lopez Obrador has also talked about reduc-
Obrador has said that his administration may ing foreign investment and putting more power
reverse the energy reform programme that his in the hands of Pemex. However, some members
predecessor Enrique Peña Nieto enacted less of his government have rallied against this state-
than a decade ago. led approach, arguing that more private invest-
The liberalisation measures, which were ment is needed to fund oil and gas projects.
rolled out in the years 2013-2014, could be For its part, Pemex is in a difficult position.
reversed if state-run Pemex and electricity util- The company posted huge losses in the first
ity CFE cannot be rescued within the framework quarter of the year, as the coronavirus (COVID-
of existing laws, Lopez Obrador said. The pres- 19) pandemic led to a drastic drop in global oil
ident, who has repeatedly asserted that private demand. It racked up a loss of MXN562.13bn
energy companies have too much freedom, ($25.09bn) between January and March, com-
also said he would do everything possible to pared with a loss of MXN35.7bn ($1.59bn) in
strengthen Mexico’s indebted public companies. the same period of last year. Then in the sec-
“I don’t want the energy sector to be priva- ond quarter, it reported a loss of MXN44.3bn
tised because if we don’t have economic inde- ($1.98bn).
pendence, energy independence, we cannot US-based ratings agency Fitch has said that
guarantee our sovereignty,” he said in a news Pemex is the most vulnerable among its peers in
conference, according to Reuters. Latin America, and may need more government
“We are looking for a balance,” he added. support to withstand the price slide. ™
The Mexican government has been in talks
recently with key business lobbies over ways of
boosting the country’s ailing economy.
Since his ascent to the presidency in 2018,
Lopez Obrador has suspended or reversed ini-
tiatives designed to open Mexico’s energy sec-
tor up to private producers. His government
decided to freeze farm-outs in his first year in
office, and it has cancelled seven tie-ups that
state-run Pemex was due to finalise next year.
There are currently three Pemex farm-outs
in operation, all of which were given the green
light in 2013 by the previous government. These
projects effectively ended Pemex’s long-standing
monopoly on production and enabled Mexico’s
first-ever oilfield auctions to take place. The president has already suspended Pemex’s farm-outs (Photo: LopezObrador.mx)

CNOOC to resume exploration work at

offshore block in northern Gulf of Mexico

CHINA National Offshore Oil Corp. (CNOOC) programme in February and originally intended
intends to resume exploration activities offshore to begin work in April.
Mexico after a hiatus of several months. Subsequently CNOOC drew up a new plan
The state-controlled Chinese major had sus- for its 1,683-square km block, which lies within
pended exploration operations at CNH-R01- the Perdido fold belt offshore Tamaulipas State.
L04-A1.CPP/2016, one of its two blocks in the It secured approval for its new plan, which
northern Gulf of Mexico, following the advent provides for the drilling of the Ameyali-1EXP
of the coronavirus (COVID-19) pandemic. It exploration well, from Mexico’s National Hydro-
received approval for its $339mn exploration carbons Commission (CNH) on September 22.

P12 www. NEWSBASE .com Week 39 01•October•2020