Member of Mexico Energy Watchdog Surprisingly Steps Down

One of the seven members on the governing panel of Mexico’s National Hydrocarbons Commission (CNH) has stepped down citing personal reasons halfway through his term, Reuters reports, adding this could give more power over the country’s oil industry to President Andres Manuel Lopez Obrador.

All commissioners from the National Hydrocarbons Commission are nominated by the president of the country and need to be approved by the Senate. In the last three months another two members of the commission have also resigned: its president, Juan Carlos Zepeda, who was nominated by the Pena Nieto government, left in November. In that same month another member of the regulator, Hector Acosta, left it to accept another government position.

At the time, Reuters recalls, these resignations caused worry that once elected, Obrador would hold a major sway over the energy regulatory body as he nominates for commissioners people close to him and his approach to the energy industry. This is actually why commissioners on the CNH serve terms that overlap but do not coincide with the terms of Mexico’s presidents, as a way of ensuring relative independence. Now that Obrador would get to nominate not one but three new commissioners, there may be some justification to the worry.

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Andres Manuel Lopez Obrador or AMLO as some media tend to refer to the Mexican president has made clear from the beginning the energy reform launched by the previous government is unlikely to survive long into his term. He ordered a review of all contracts with international oil companies signed by Pemex after the reform and has more recently suspended new joint ventures with foreign energy companies.

The new government wants the state to have more control over the country’s energy industry, which was in direct opposition to what the Pena Nieto government tried to do by opening up Mexico’s oil and gas reserves to public tenders in a bid to reverse a steady decline in oil and gas production. With Pemex deeply in debt, Obrador may need to reconsider his approach as he is unlikely top be on board with the idea of the government continually bailing out the state energy company with production still in decline.

By Irina Slav for Oilprice.com

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