IHS CERAWeek: Mexico’s president vows to implement energy reform despite low oil prices

Mexico President Enrique Pena Nieto said his nation’s energy reform stemmed from an intense, collective effort early in his administration. Mexico’s energy reform legislation was passed in 2014 and will continue to be implemented on a timely basis, he told IHS CERAWeek attendees Feb. 22 in Houston.

“With this reform, the Mexican state retains ownership of the underground hydrocarbons,” and opens up the hydrocarbon value chain to outside investors, Pena Nieto said. “It is being implemented with success and faster than expected.”

He said, “It is not the time to stop. It is the time to move forward,” speaking about the nation’s energy reform schedule despite low oil prices. “We will maintain a stable and competitive tax framework.”

Daniel Yergin, IHS vice-chairman and CERAWeek conference chairman, presented Pena Nieto with the IHS CERAWeek Global Energy Lifetime Achievement Award before Pena Nieto’s opening address.

“No country has so profoundly modernized its energy sector in such a short period,” Yergin said.

Petroleos Mexicanos (Pemex) was allowed to keep much of the shallow-water acreage during a previously completed Round Zero. Phases in Round One have included shallow-water blocks and onshore conventional blocks in the states of Chiapas, Nuevo Leon, Tabasco, Tamaulipas, and Veracruz (OGJ Online, Jan. 4, 2016).

The energy reform enables outside investors to participate in exploration and production in Mexico for the first time since Mexico’s petroleum industry was nationalized in 1938.

“After 7 decades of having a completely closed energy sector, there is much to be learned to having an open dialogue,” Peno Nieto said. “I assure you that we will maintain the rhythm.”

The highly anticipated fourth phase will be opened to bids in early December, he said. This phase will comprise deepwater areas in the Gulf of Mexico. Previously, Mexico energy officials have said that the fourth phase will include exploration blocks in the Salina basin and in the Perdido fold.

Currently, Pemex has to overcome low oil prices through “smart financial decisions” that will involve cutting expenses and improving efficiencies, he said, adding includes Pemex making partnerships with other companies.

“This national transformation process…is ongoing,” he said. “We will continue to increase our economic integration with the United States. We will work to make it real,” Pena Nieto said.

Contact Paula Dittrick at paulad@ogjonline.com.

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