Page 13 - LatAmOil Week 42

LatAmOil MEXICO LatAmOil

Mexico moves to ban new energy

permits and protect state firms

MEXICO’S Energy Regulatory Commission decades-long monopoly on production to an
(CRE) is reportedly moving to restrict private end and enabled Mexico’s first-ever oilfield auc-
investment in the country’s energy sector, in an tions to take place.
attempt to protect state-owned oil and utility Lopez Obrador, who assumed power in
companies. 2018, has reversed his predecessor’s strategy of
The state agency is taking this step in opening up the energy sector to private produc-
response to an appeal from President Andrés ers. His government decided to freeze farm-outs
Manuel López Obrador last month to ban new in his first year in office and has cancelled seven
energy permits, according to government doc- tie-ups planned for Pemex for next year.
uments seen by the Financial Times. The doc- There are currently three Pemex tie-ups in
uments instructed officials to “abstain from operation. All three were given the green light
implementing processes” laid out in three previ- by the previous administration in 2013.
ous regulations that date back to 2017 and 2018, When Lopez Obrador assumed the presi-
the report said. dency, he vowed to reduce foreign investment
A former energy official told the FT that the and put more power in the hands of state-owned
documents stipulated that decisions concerning Pemex. He reiterated that sentiment last month,
imports and exports, updates and authorisations saying that his government might reverse the
for permits and approval for power generation 2013-2014 reforms if Pemex and CFE could not
activity would now have to go through the board be rescued under existing laws. ™
of the CRE.
When contacted by the newspaper for com-
ment, a spokeswoman for the commission said
that the documents in question were internal
materials. The documents have “modified inter-
nal processes in support of the fight against cor-
ruption and transparency” and should “not be
misinterpreted,” she said.
Market analysts and former officials fear that
the move represents an attempt to discrimi-
nate in favour of the state-run oil and gas firm
Pemex and the state-run utility CFE, without
having to make any changes to the law. Mexico’s
current legal regime includes reforms enacted
by the previous president, Enrique Peña Nieto,
in 2013-2014. Those reforms brought Pemex’s The new policy may be a bid to discriminate in favour of Pemex (Image: Pemex)

Work on Dos Bocas refinery

said to be 24% complete

MEXICO’S national oil company (NOC) Pemex the facility is now 24% complete.
is moving forward with work on the Dos Bocas Pemex unveiled plans for the construction
refinery project. of a 340,0000 barrel per day (bpd) refinery in
President Andres Manuel Lopez Obrador Tabasco, the president’s home state, in 2018 and
and Energy Minister Rocio Nahle told reporters began work on the first stage of the facility the
in Mexico City last week that Pemex’s refining following year. It then launched second-stage
division, Pemex Transformación Industrial, had operations earlier in 2020 and has allocated
completed the first stage of the oil-processing some MXP50bn ($2.38bn) in budget funding
plant. As a result, they said, the construction of for the project this year.

Week 42 22•October•2020 www. NEWSBASE .com P13