Remember meForgot password?
    Log in with Twitter

article imagePerry says an energy independent Mexico is no threat to U.S.

By Karen Graham     Aug 16, 2018 in Politics
Andrés Manuel López Obrador decisively won the Mexican presidential election on July 1 in a populist campaign that had energy reform as one of its core issues. One of the things Lopez Obrador pledged to do was end imports of refined products by 2022.
It wasn't but a few years ago that Mexico's vast gas and oil reserves were opened up to international investors and markets. It was a positive move on the government's part in the hopes of not only creating fresh interest but fresh capital.
Gustavo Stenzel and Santiago Petri of Franklin Templeton Emerging Markets Equity point out in a recent note that since hydrocarbons were nationalized in 1938. Mexico's energy industry and its private sector finances have been closely "interlinked."
They also point out that Pemex, the national oil company, had been transferring royalties and taxes to the federal government, and by 2014, this represented close to a third of fiscal revenues. But “the government’s burden on the national oil company resulted in declining production," the note added.
Mexico's President-elect Andres Manuel Lopez Obrador is seeking a "new relationship" ...
Mexico's President-elect Andres Manuel Lopez Obrador is seeking a "new relationship" with the United States
Anyway, with cash generation compromised by the Pemex-government setup, it was decided that the energy sector needed a rescue, and by the end of 2013, comprehensive energy reforms were approved. The reforms allowed for a number of positive changes, including profit sharing, production sharing, and licenses that provided more choices to previously restrictive, service-only contracts.
However, when López Obrador takes office on December 1, AMLO, as he is popularly known, has plans to revise or even delay any new offerings of gas and oil acreage for exploration. He also wants to make good on his campaign promise to become energy independent and increase the country's refining capacity and develop domestic gas supplies.
Just last month, Lopez Obrador announced a $16 billion investment plan to increase Mexico’s oil production, refinery capacity and electrical generation. And we have already seen the results of Mexico’s second renewable energy power auction with the opening of the Reynosa I wind farm on Monday.
Pemex posted net profits of 113 billion pesos ($6.2 billion) from January to March  up 29 percent f...
Pemex posted net profits of 113 billion pesos ($6.2 billion) from January to March, up 29 percent from the same period last year, and an improvement on its $18 billion loss in the last three months of 2017
US Energy Secretary Rick Perry appeared to be thrilled with AMLO's initiative, saying at a media roundtable in Mexico City on Wednesday that Mexico poses no threat to U.S. refiners.
"We are going to have more markets, most likely, than we are going to have products to export," Perry told reporters late Wednesday after meeting with the energy team of Mexico's president-elect, Andres Manuel Lopez Obrador.
"It is a good goal for Mexico [to be energy independent]. I tip my hat to the president-elect for having that as a goal, but we know this won't happen overnight," Perry said.
Perry, in his own way, apologized for President Donald Trump, acknowledging the president had said some “harsh things” about Mexico but attributed it to Trump’s negotiating style. “I think the president does have a very respectful and appreciative view of Mexico,” Perry said. “The president is different than maybe anybody that’s ever served there before.”
More about Mexico, energy independent, Andres Manuel Lopez Obrador, fracking ban, US refineries
Latest News
Top News