CNH Officials Sacked for Not Obliging with PEMEX: Reuters

A report from Reuters said officials at the National Hydrocarbons Commission (CNH) who rejected Pemex's plans for the Quesqui field, among other development plans, were subjected to pressure and subsequently forced to resign.

According to Reuters, Mexico's state-owned energy company, PEMEX, faced criticism over its controversial move to secure regulatory approval for the development of the Quesqui oil field, despite preliminary plans being rejected by CNH in June 2022. The plan was deemed both technically and economically unsound, and concerns were cited by the regulatory company about NOC’s ability to execute the project. As a result, PEMEX’s management was displeased with the rejections and sought to replace the officials with individuals who were willing to approve its proposals.

Rogelio Hernandez, the former Head of CNH, resigned from his position in August 2022 under pressure from government officials. He was replaced by Agustin Diaz Lastra, a former PEMEX official. In October, Diaz Lastra was selected by President López Obrador to run the institution. Similarly, in November, a week before the second vote, Rafael Guerrero replaced Julio Trejo, the former technical head. Guerrero's previous position was the legal representative in charge of dealing with the regulator at PEMEX. The series of resignations and appointments of former PEMEX officials in key positions of the CNH has raised the influence of the government over the independent regulatory body. 

Despite the change of the officials at CNH, the forecasted concerns did come true as PEMEX reportedly destroyed resources worth US$275 million from the Ixachi field in three years and US$67 million from the Quesqui field in two years due to poor planning and inadequate maintenance.

The NOC was said to have lost around 3.4MMb in the Xanab and Yaxche fields in 2021, which could have generated significant revenue for the cash-strapped company. The revelation of these losses comes as PEMEX faces increasing pressure to reverse its declining production and profitability, which has been hampered by underinvestment and chronic mismanagement, according to analysts.

These fields were expected to play a crucial role in the country's broader efforts to achieve energy independence. The development raises questions about the feasibility of Lopez Obrador's energy independence plan, the management of PEMEX under his administration and the government’s control of its regulatory body.