ASSESSMENTS

Mexico's President-Elect Continues to Refine His Energy Policies

Oct 19, 2018 | 09:00 GMT

Mexican President-elect Andres Manuel Lopez Obrador speaks to reporters in Mexico City on July 5, 2018, to announce that his pick for foreign minister is former Mexico City Mayor Marcelo Ebrard.

Mexican President-elect Andres Manuel Lopez Obrador is considering major energy reforms, although Mexico's political and business realities might reduce the scope of any changes.

(MANUEL VELASQUEZ/Getty Images)

Highlights

  • Mexico's new government under President-elect Andres Manuel Lopez Obrador will craft an energy policy distinct from that of the previous administration, but it is unlikely to involve constitutional reforms that affect the energy sector's 2013 opening to private capital.
  • The incoming administration will focus on raising capital to increase exploration and production at state energy company Pemex, perhaps through an initial public offering.
  • As part of the new government's proposed changes, Pemex could earn the power to directly partner with other companies or auction state oil and gas blocks — the latter of which could raise concerns about transparency.

There are just about six weeks to go until Mexico's new leader takes office, yet policy in one area that has attracted some of the hottest speculation, energy, remains very much a work in progress. Leftist President-elect Andres Manuel Lopez Obrador -- popularly known by the nickname AMLO -- rode a wave of public discontent with the incumbent administration and corruption to the presidency. On the campaign trail, however, Lopez Obrador also directed his ire at another bugbear: the country's 2013 energy reform. And now that Lopez Obrador is about to assume power, it's becoming clear that his administration is exploring options to craft an energy policy distinct from that of his predecessor, Enrique Pena Nieto. Although the incoming administration has leaked numerous potential policy choices to the press, just a few plausible options are emerging -- in part because the country's economic and fiscal realities have narrowed Lopez Obrador's...

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