Mexico’s Election Next Year Poses No Risk For Oil Contracts

From Oil and Gas Investor / Reuters / Monday, October 2, 2017 – 8:26am
“Presidential elections in Mexico next year pose no risk to already-signed oil contracts, the sector’s top regulator said on Sept. 29, despite the current frontrunner’s pledge to review them.”

“To date, some 70 E&P contracts have been inked with several dozen foreign and private oil companies, fruit of a 2013 opening of the sector that ended state-owned oil company Pemex’s decades-long monopoly.”

““These are completely solid contracts,” Juan Carlos Zepeda, head of Mexico’s National Hydrocarbons Commission, said in an interview, adding that there is “no risk” that Mexico’s next government could revoke them.”

“Presidential elections are schedule for July 2018, and the early leader in public opinion polls is leftist Andres Manuel Lopez Obrador, a former Mexico City mayor who has been sharply critical of the energy reform.”

“A two-time runner-up, Lopez Obrador has proposed a nationwide referendum on the energy reform and he has also said he would review the contracts.”

““The entire energy framework is in the constitution and that provides it with durability and makes it very difficult to repeal,” said Zepeda, noting that constitutional changes require a two-thirds majority in Congress which no party is likely to gain in next year’s vote.”

“The regulator has run seven oil auctions so far and plans another deepwater round in January which is expected to draw interest from top global oil majors.”

From Oil and Gas Investor / Reuters / Monday, October 2, 2017 – 8:26am