Mexico is retreating from the 2014 liberalization of its oil and gas regime.
“It is contemplated that public investment will be complemented by private investment through long-term service contracts for oil production,” Pemex Chief Executive Officer Octavio Romero Oropeza said July 18 in a presentation of the state-owned company’s business plan for 2019-23.
Under reforms implemented during the administration of former President Enrique Pena Nieto, Mexico opened exploration and production to foreign and private-company participation through a variety of mechanisms, including production and profit-sharing contracts, and held several bid rounds for onshore and offshore licenses (OGJ Online, Aug. 7, 2014).
Until the reforms, Pemex had monopolized upstream work since nationalization of the Mexican oil and gas industry in 1938.
The fate of Pena Nieto’s reforms has been in question since the election last year of President Andres Manuel Lopez Obrador, who had been critical of the change.
Since taking office for a 6-year term, Lopez Obrador has suspended licensing rounds but left existing agreements with private operators in place.
According to a Pemex press release, Romero Oropeza said Lopez Obrador considered the business plan “a rescue of the country’s energy industry after the resounding failure of the energy reform.”
The Pemex chief said the plan aims to relieve the company of its heavy debt load and make it “an engine of national development and guarantor of energy sovereignty.”
He said the plan seeks to raise oil production to 2.697 million b/d by the last year of the Lopez Obrador administration.
Mexican production now is 1.695 million b/d.
Paraphrasing Romero Oropeza, the press release said, “The objective for the government is to support Pemex for the first 3 years of the administration, in what will be a transition stage to recover oil production, so that, in the second half of the administration, Pemex will support the federal government in financing the development and economic growth of our country.”