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Mexico could delay its planned reform of the energy sector until next year after President Andrés Manuel López Obrador asked regulators this week to help shore up state oil company Pemex, Reuters reported, citing anonymous sources with knowledge of him.
According to sources, López Obrador asked regulators to suspend the issuance of new permits to private companies to reduce competition against Pemex and state power company CFE. In addition, the president also said that he plans to refinance the debt of Pemex, which is the largest in the world oil industry.
Reports emerged earlier this month that the López Obrador government planned to cut off foreign oil companies’ access to Mexico’s fields. The stipulation was expected to be made in a new infrastructure plan to be published later. This countered previous media reports that Pemex was looking to divest some fields to foreign partners, and the head of the energy regulator, Rogelio Hernández, said the company was actively looking for those partners.
López Obrador has been outspoken in his efforts to stabilize Pemex and keep it the dominant player in the Mexican oil market. Contracts with foreign oil field operators signed by the previous administration are currently under review for evidence of corruption and new tenders for oil and gas blocks have been suspended until the review is completed.
Pemex does not have the means and resources to develop the fields on its own, a fact that became evident after the company lowered its production target for 2021. Mexico’s Finance Ministry said it now expected Pemex produced 1,857 million bpd in 2021, below the projection of 2,027 million bpd made in April this year. Some believe that even this would be difficult to achieve given Pemex’s financial troubles. Production continues to decline, hitting a record low in July due to a sharp drop in production at the company’s largest field.
By Charles Kennedy for Oil Moderno
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