Page 4 - LatAmOil Week 16 2022
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COMMENTARY Y
      LatAmOil                                      COMMENTAR                                             LatAmOil







































                                                                      The president notes the outcome of the vote (Photo: LopezObrador.org.mx)
       The failure of CFE reform





       and the future of oil and gas







       AMLO’s failed attempt to secure CFE’s leading role is a signal of willingness to continue

       waging a similar fight on behalf of Pemex, though not always through legislative means



                         MEXICO’S President Andres Manuel Lopez   Why does this matter for the oil and gas
                         Obrador has, on the face of it, suffered a major   industry? Of course, it is significant because the
       WHAT:             political defeat over the past week.  power-generating sector is a major consumer
       Mexico’s president   On April 17, Easter Sunday, Mexican law-  of natural gas and petroleum-derived fuels. But
       has failed to secure a   makers gathered to vote on the president’s draft   the fate of the CFE reform bill is also important
       super-majority of votes   electricity reform bill, designed to reform the   because it is a signal of the political course Lopez
       for his power sector   constitution to ensure the Federal Electricity   Obrador is likely to follow for the rest of his six-
       reform bill.      Commission (CFE), the country’s state-run   year term in office.
                         power provider, has a majority share of the
       WHY:              domestic market. The measure would have     AMLO’s aims
       The draft legislation   guaranteed CFE a 54% share of the electricity   In all likelihood, the president already knew,
       would have guaranteed
       CFE a majority share   market, cancelled all private sector contracts   before he submitted the bill to the National
       of the domestic power   and restricted sales by independent power pro-  Congress, that he probably could not secure the
       market.           ducers (IPPs) to CFE.                necessary number of votes.
                           Some 275 legislators voted for the bill, while   He might have done so prior to Mexico’s
       WHAT NEXT:        223 voted against it. As such, Lopez Obrador did   mid-term elections, in which his political party,
       AMLO is likely to impose   secure a simple majority, but he did not win the   MORENA, and its allied factions lost their
       more administrative   two-thirds super-majority necessary to amend   super-majority in the legislature, but he had lit-
       measures in Pemex’s   the constitution as he had hoped.  tle chance of achieving his aims under current
       favour.             In short, the electricity reform bill failed.  conditions



       P4                                       www. NEWSBASE .com                           Week 16   21•April•2022
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