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Will The Real Pemex CEO Please Stand Up?

Since its founding in 1938, the Mexican state oil and natural gas company Petroleos Mexicanos (Pemex) has been regarded with reverence as a symbol of national sovereignty. Yet amid the enthusiasm and the controversy generated by the 2013-14 energy reform, the company has often appeared to be an afterthought.

In the early days of reform, the government pointed to Pemex as a linchpin of the changes in the industry. But so far, in the twilight of the six-year administration of President Enrique Pena Nieto, author of the reform, Pemex has had three different directors-general.

None of them had previous experience in the oil and gas business. Short-termism is very much the name of the game in Pemex management, pointed out Energia.com’s George Baker, who directs the Houston-based consultancy.

Unlike other state-run oil companies, including Norway's Statoil ASA and Colombia's Ecopetrol SA, which have well-honed oil and gas management teams in place, "Pemex is not run as an oil company but as a government department," Baker said.

Carlos Ruiz Sacristan was appointed as Pemex chief on December 1, 1994 on the inauguration of President Ernesto Zedillo. Within 10 days, he hosted a welcoming cocktail party for the media. Less than 10 days later he was moved.

The reason? Mexico had been plunged into a grave financial crisis. The finance minister had to be removed and Zedillo picked the communications secretary to replace him. Therefore, the Pemex chief was named as communications secretary.

The postscript to the story is that when the Zedillo administration ended, Ruiz Sacristan joined Sempra Energy's Mexico unit. Infraestructura Energetica Nova SAB de CV, aka IEnova, was helmed by Ruiz Sacristan for more than 15 years, a fairly normal length of tenure for a CEO in the international energy industry, though clearly not one for Pemex.

Of the three Pemex directors-general of the Pena Nieto administration, the first was Emilio Lozoya Austin, believed to be a close associate of the president, with a master’s degree in public administration from Harvard University and formerly a young regional leader of the World Economic Forum.

The well-spoken, smartly dressed Lozoya was regarded as a poster boy for energy reform and was used as such in several roadshows. He was removed, however, as Pemex CEO in February 2016, without explanation.

Lozoya’s business acumen, however, had been severely questioned by many in the industry, and the Pemex accounts pointed to billions of dollars in losses. More recently, an informant in Brazil's Odebrecht corruption scandal pointed to Lozoya as receiving millions in bribes involving Pemex contracts.

The accusations, which Lozoya and his lawyers have roundly denied, have been reinforced by videos published this week in Mexico.

Lozoya was replaced by Juan Antonio Gonzalez Anaya, the previous head of the Mexican Social Security Institute. Gonzalez Anaya was regarded as an extremely efficient financial operator, who put the institute's house in order and was praised by patients of its health services for slashing waiting lists for treatment.

Gonzalez Anaya appointed his former No. 2 in the Social Security Institute to essentially the same position in Pemex. Formerly the second-in-command, Carlos Trevino is now the No. 1 in Pemex, following the departure of Gonzalez Anaya.The allotted timespan for Trevino's rule is predestined, Baker said.

 "It would be a huge shock if he lasts beyond Dec. 1, when the next president is inaugurated," he said. “The real Pemex chief is the Mexican president and always has been.”   

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