Editor’s Note: This is one in a series of pieces NGI is undertaking as the energy industry readies for the new year. With Lower 48 natural gas and oil supply continuing to surge in an uncertain environment as liquefied natural gas exports ramp up, Mexico markets remain shrouded and stakeholders demand more value.
On Sunday, exactly one year after taking office, Mexican President Andrés Manuel López Obrador told a packed Zocalo square in Mexico City that he had fulfilled 89 of his 100 campaign promises and said by next year at this time everything would be in place to construct “a new country.”
Mexicans remain optimistic about their president, with his approval ratings, while down slightly from his first few months in office, still strong and stable at 65-70%. However, analysts said there are various difficulties facing the country that were not present when he came into office.
What has the presidency of López Obrador meant for Mexico, in particular in the energy sector?
The indefatigable López Obrador, who holds an early morning, hours-long press conference each day, came to power vowing to completely transform Mexico, including its recently opened energy sector. He has, by and large, followed through on his word.
In his 12 months in office, he has canceled upstream oil and gas rounds and farmout tenders; postponed electricity auctions; slashed the budgets of energy sector regulators that he feels have unfairly favored nonstate entities; renegotiated natural gas contracts with developers; and injected fresh capital into the state oil company Petróleos Mexicanos (Pemex), vowing to rebuild the oil giant that he alleged previous administrations had destroyed.
López Obrador hails from the oil state of Tabasco and claims Lázaro Cardenas, who nationalized Mexican oil and created Pemex in 1938, as his role model. He was careful to highlight what he perceived as energy sector gains in his one-year anniversary speech.
“It’s an honor to inform you that for the first time in 14 years, we stopped the progressive drop in oil production,” he told thousands of supporters on Sunday.
He also proclaimed that fuel theft has declined by 94% in one year, and said the natural gas contract renegotiations which he presided over would prove fundamental to Mexican power production and economic development over the next 20 years. He also praised the construction of a new refinery the port of Dos Bocas that he had promised for his home state.