Mexico’s Next President Could Be More Open to Private Energy Investment

Claudia Sheinbaum, a former mayor of Mexico City who has a huge lead in polls to become Mexico’s next president, could be more open to private investment in the energy sector than incumbent Andrés Manuel López Obrador, Sheinbaum’s aides and other officials have told Reuters.

Ahead of the June 2024 elections, Sheinbaum is leading in polls by an enormous margin over her main rival and is supported by López Obrador, who will be leaving office because Mexican law allows a president to serve only one six-year term.     

López Obrador has been strongly favoring state ownership of energy assets and support for state oil giant Pemex.

Sheinbaum’s key policies are not expected to be materially different from López Obrador’s, including in the pledge to keep at least 54% of domestic power generation under state ownership, according to Reuters.

But aides to the presidential candidate have told Reuters that private investment could be more important, especially considering the fact that Sheinbaum plans to favor an acceleration of renewable capacity installation.

Aides, politicians, and former officials told Reuters they expect Sheinbaum to adopt a more pragmatic approach to energy investments due to Mexico’s budget struggles and the need to avoid new disputes over investments in Mexico.  

Since López Obrador took office at the end of 2018, he has passed many laws favoring state oil giant Pemex and the national power company, Comisión Federal de Electricidad (CFE), as the leftist president has sought a greater role for state-held energy firms and has tried to overturn some of the energy reforms of his predecessor, Enrique Peña Nieto.

The U.S. has expressed concerns over the priority status of Mexico’s state energy firms under López Obrador, which gives those companies an unfair advantage over U.S. producers and U.S.-produced energy under the United States-Mexico-Canada Agreement. Big Oil companies, such as Chevron and Marathon Petroleum, alongside a host of solar and wind energy companies, have struggled to obtain permits to operate in Mexico.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Prices Poised to Bounce Back in 2024
• Putin Orders Asset Seizures From Austrian and German Energy Giants
• Clean Energy Bulls Finally Have Reason To Be Positive