Page 4 - LatAmOil Week 35 2021

COMMENTARY Y
LatAmOil COMMENTAR LatAmOil

AMLO’s legislative agenda

for the oil and gas sector

Mexico’s president has declared that he wants to amend the constitution to

favour CFE but does not appear to be contemplating a similar measure for Pemex

MEXICO’S oil and gas sector has a long track owned companies and foreign investors to bid
record of following the government’s lead. It on oil, gas and electricity projects – as majority
WHAT: has been under the control of the state since owners and as operators, not just as junior part-
Lopez Obrador is talking 1938, when Mexican authorities nationalised ners to Pemex or CFE.
about enshrining CFE’s the industry and assigned it to a new state-run These reforms have served to break Pemex’s
leading role in a consti- company known as Pemex. monopoly on oil and gas in Mexico. The break
tutional amendment but Ever since then, Pemex has been the main was never complete, as the national oil company
will probably not do so driver of upstream and downstream oil and (NOC) still accounts for nearly all of the coun-
for Pemex. gas operations. It shares responsibility for mid- try’s crude oil output and most of its production
stream activities with Federal Electricity Com- and sale of refined fuels. However, the energy
WHY: mission (CFE), another state-run company that reforms seemed at least to point toward a future
His plans are in line with acts as the national power provider. (CFE builds in which the government would not have the
previous statements natural gas pipelines to ensure fuel deliveries final say over the hydrocarbon sector.
about letting the govern-
ment lead the way in the to its thermal power plants, or TPPs.) Overall,
energy sector. though, it is the main engine of the Mexican Government’s leading role
hydrocarbon sector. They also drew the ire of Peña Nieto’s succes-
WHAT NEXT: For the most part, Mexican authorities have sor – Andres Manuel Lopez Obrador, who was
Even if he does not been content to let the company preserve its elected to the presidency in 2018. (Under Mex-
amend the constitution in monopoly. That changed after the election of ican law, presidents may only serve a single six-
Pemex’s favour, AMLO is Enrique Peña Nieto as president in 2012. In 2013 year term.)
likely to disadvantage the and 2014, Peña Nieto’s market-oriented admin- Lopez Obrador, a populist with some leftist
NOC’s competitors. istration succeeded in introducing a package of leanings, has not followed Peña Nieto’s example
energy reforms that made room for privately with respect to energy policy.

P4 www. NEWSBASE .com Week 35 02•September•2021