ASSESSMENTS

The Next Mexican President's Nationalist Approach to Energy

Aug 15, 2018 | 09:00 GMT

A Petroleos Mexicanos (Pemex) refinery processes petroleum in Tula, Mexico.

Structures used to precess oil are seen at a Pemex refinery in Tula, Hidalgo state, Mexico, on March 8, 2011. 

(OMAR TORRES/AFP/Getty Images)

Highlights

  • Mexico's incoming government is unlikely to try to broadly alter the constitutional amendments that opened the country's energy sector to private capital.
  • The new administration will attempt to use legislation and presidential decrees to mitigate what it considers to be the negative effects of energy reform, such as rising fuel prices.
  • The new government will likely adopt a more nationalist approach in managing the exploration for and production of oil and natural gas, possibly by slowing the pace of bids on exploration or by crafting contracts that maximize benefits for the Mexican government.

Despite his populist rhetoric, the next president of Mexico will largely play by the rules when it comes to the country's energy reforms. President-elect Andres Manuel Lopez Obrador takes office on Dec. 1, and he and his party may have the votes in Congress to challenge the 2013 constitutional changes that opened most of Mexico's energy sector to private investors. But any such move would meet strong resistance at home and from abroad, and it could also damage the country's economy. What the next administration will do is target the parts of the reform that it deems harmful to the people of Mexico, and some of those changes could complicate foreign investment....

Subscribe to view this article

Subscribe Now

Subscribe

Already have an account?