/
News Article

Private Sector Vital to Mexico’s Energy Sovereignty

Thu, 07/18/2019 - 11:27

The President of the Energy Commission in the Chamber of Deputies, Manuel Rodríguez González, opened the second day of Mexico Oil & Gas Summit 2019 by saying the private sector would play a vital role in confronting the challenges Mexico’s energy policy must overcome to provide a long-term, accessible and sovereign energy solution.

Rodríguez González began his keynote presentation by pointing out the challenges the new energy policy, brought in under the current administration, faces. He noted that between 2008 and 2018, PEMEX production fell by almost 50 percent while by 2018, Mexico’s National Refinery System was operating at a rate of just 41 percent. Oil theft, a problem that has plagued Mexico for decades, was also underlined as a major problem to both PEMEX’s and the country’s financial position. “The theft of hydrocarbons between 2014 and 2018 represented a loss to PEMEX of MX$100 billion (US$5.2 billion),” he said.

He also highlighted the country’s high gas imports, which must be reduced, and low storage capabilities as areas that need to be improved. “It is worthwhile pointing out that 90 percent of the gas consumed in Mexico is imported from the US,” said Rodríguez González.

However, he said that the necessity to formulate a plan that will develop the country’s energy sector and guarantee the population has access to an affordable energy source is essential. “The establishment of a sovereign energy policy, low in emissions and high in efficiency, is of vital importance to guarantee both the national economy and the accessibility of competitive energy prices. This will lead to the energy security of Mexico,” said Rodríguez González.

As the private sector continues to chew over PEMEX’s Business Plan, released on Tuesday, Rodríguez González sought to reassure the private sector that it would have an ongoing role under the new government. He underlined the recent success of Italian super major Eni, which at the start of this month began production on its Mitzón field platform, and said that private sector involvement was essential to Mexico meeting its energy goals. “The participation of the private sector occupies a place of first order in meeting the challenges faced by the hydrocarbon chain, and in the Energy Reform, whose foundations remain intact,” he said. “As presented in PEMEX’s Business Plan, public investment will be complimented by private investment through long-term service contracts.”

He also pointed to the construction of the Dos Bocas refinery, to begin this year, as a moment of opportunity for private players. “The authorities have made very clear that during the distinct stages of the Dos Bocas construction, licensing rounds will be opened for the participation of national and international companies. That is to say, private participation is guaranteed.”