The new Mexican government will not remove the energy sector reform introduced by the previous administration in 2013, the president-elect’s chief of staff told Bloomberg in an interview.
Andres Manuel Lopez Obrador will review oil contracts for signs of corruption, Alfonso Romo said, but "If anything happens, it would be done without hurting private investment." If anything suspicious is found in any of the contracts, Romo explained, the government will talk with the companies concerned before any action is considered.
There was considerable worry that the leftist Morena party candidate Obrador would upend the reform after pledging during his campaign that Mexican oil will never again fall into the hands of foreigners.
However, people more familiar with the president-elect cautioned against this anxiety, noting that Obrador is more pragmatic than idealistic, and a lot of what’s done on the campaign trail stays on it. Romo’s interview has supported this stance: the chief of staff said Obrador has no plans to take away oil licenses, and for the time being, he has no plans to overhaul the industry as Obrador had said during his campaign.
The energy sector reform from 2013 saw billions of dollars pour into Mexico in pledged investments as private companies returned to the country to take part in the expansion of Mexican oil production. Increasing production has been at the heart of the reform as the country had been struggling with falling output for the last decade.
"What do we want to do? We want to take advantage of all of the enthusiasm we’ve generated to fix everything we can," Romo told Bloomberg. “Mexico has a necessity for lots of money for offshore drilling.”
As long as private investment contributed to a recovery in production “no one will fight success."
By Irina Slav for Oilprice.com
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