Mexican President Holds Back Energy Counter-Reform, for Now | Investing News


FILE PHOTO: Excess natural gas is burnt, or flared, from Mexican state-owned Pemex’s Tula oil refinery, located adjacent to the Tula power plant belonging to national power company Comision Federal de Electricidad, or CFE, in Tula de Allende, north of Mexico City, Mexico June 22, 2020. Picture taken June 22, 2020. REUTERS/Henry Romero/File PhotoReuters

MEXICO CITY (Reuters) – Mexican President Andres Manuel Lopez Obrador said on Thursday he may reverse Mexico’s 2013-2014 energy liberalization next year if he is unable to “rescue” state oil company Petroleos Mexicanos and electricity utility CFE with existing laws.

Lopez Obrador has long held the view that the private sector has been given too much freedom in Mexico’s energy industry, at the expense of the state-owned companies and the nation’s energy independence.

“I don’t want the energy sector to be privatized because if we don’t have economic independence, energy independence, we cannot guarantee our sovereignty,” he said in his morning news conference.

“We are looking for a balance,” he said, giving the example of electricity, 54% of which he said should by generated by CFE and the rest by private business.

Lopez Obrador said he would do everything he could to strengthen the indebted public companies, when asked if the steps could include refinancing debt.

Pemex, which has about $107 billion of financial debt, has already received fiscal support and debt refinancing since Lopez Obrador took office two years ago.

The nation’s energy regulators should help in the task of saving the companies that had been run down by previous governments, he said.

Reuters reported earlier this week that Lopez Obrador had decided to hold off on a possible counter-reform until next year, and had asked regulators to help support Pemex and CFE, including by limiting permits that could allow private companies to increase market share.

(Reporting by Ana Isabel Martinez; Additional reporting by Raul Cortes Fernadez; Writing by Laura Gottesdiener; Editing by Frank Jack Daniel and Steve Orlofsky)

Copyright 2020 Thomson Reuters.

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