Mexico President Andrés Manuel López Obrador touched on multiple issues relevant to the hydrocarbons sector during his daily morning press conference on Wednesday, including the Tuxpan-Tula natural gas pipeline, oil and gas bid rounds and a pending public-private energy investment plan.
In response to questions from the media, López Obrador repeated his assertion from last Saturday that he will ask TC Energy Corp. to seek an alternative route for the 56-mile middle section of the 178-mile, 886 MMcf/d Tuxpan-Tula natural gas pipeline, saying that work has not begun on the section’s originally planned route “because the people won’t allow it and in this case, the people are right.”
Progress on the middle stretch has been delayed, pending the completion of an indigenous consultation by energy ministry Sener.
López Obrador on Saturday pledged that the pipeline in central Mexico would be rerouted so as not to pass through sacred indigenous hills.
However, he told reporters on Wednesday, “we need in this zone, as in the rest of the country, electric energy,” adding that power plants in the area “require gas to produce electric energy.”
He added that Tuxpan-Tula is the only gas pipeline under construction that the government will seek to reroute, saying that for the others, “there is no problem.”
Asked whether oil and gas bid rounds might resume this year, the president said they will not, calling the 2013-2014 energy reform that made the rounds possible “a complete failure,” a line familiar to anyone who has followed López Obrador’s energy rhetoric since he took office in December 2018.
The president said that winners of oil and gas contracts awarded through the reform are not fulfilling their investment commitments, although private oil and gas trade group Amexhi published a report last month demonstrating the opposite.
Amexhi said it expects oil and natural gas production from the private sector to reach 280,000 b/d and 450 MMcf/d, respectively, by the end of 2024.
Excluding the Ek-Balam contract, which pertains solely to state oil company Petróleos Mexicanos (Pemex), upstream contracts awarded under the energy reform were producing 47,000 b/d of oil and 229.3 MMcf/d of gas as of November 2019, representing year-over-year increases of 62% and 43%, respectively.
Although the future of bid rounds remains unknown, López Obrador did say that the government will unveil, by mid-February at the latest, “a joint investment plan” comprising “public-private investment in the energy sector, that includes Pemex and the Comisión Federal de Electricidad (CFE),” Mexico’s 100% state-owned power utility.
Through the plan, he said, authorities will define which oil and gas fields can be developed by the private sector.
Other pipelines under construction that have faced delays in Mexico include Fermaca’s Aguascalientes-Guadalajara-Villa de Reyes, Grupo Carso’s Samalayuca-Sásabe and TC Energy’s Tula-Villa de Reyes.