AMLO win increases Mexico energy risk: Moody’s

MEXICO CITY, July 3, 2018 – The energy plans of president-elect Andrés Manuel López Obrador (AMLO) could be harmful and stall short- and long-term progress in the domestic oil and gas industry, rating agency Moody’s said in a statement on Monday.

The agency added that plans such as implementing price controls for the newly liberalised fuel retail market “would generate losses for Pemex’s refinery and marketing operations, especially if international oil prices increase or if the peso weakens against the US dollar.”

Referring to AMLO’s promise to review E&P contracts signed since the country’s energy reforms began in 2014, Moody’s said the process “would effectively halt all new auctions of oil and gas assets.”

However, Mexico’s oil and gas regulator, the National Hydrocarbons Commission, on Monday released a statement saying it would welcome a review and that it “has established transparency and accountability as the basis for its performance within the framework of full compliance with its legal mandate.”

Since Mexico’s first E&P auction was held in 2015, the CNH has awarded 107 licences and approved more than USD 12 billion in upstream investments, according to its official data. Two more tenders under the Round 3 bidding process are scheduled to take place in September.

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