A Review of the Nigerian Energy Industry

Mexico’s Lopez Obrador pushes Big Oil to hurry, but offers little

*Mexican President-elect Andres Manuel Lopez Obrador

17 October 2018, News Wires — At his first meeting with foreign oil majors, Mexico’s leftist president-elect pushed the companies to prove themselves by quickly pumping oil from recent finds, sources say, but gave no sign of offering up new fields to reverse dwindling output.

President-elect Andres Manuel Lopez Obrador repeated a promise to respect more than 100 existing contracts awarded following a sweeping five-year-old energy overhaul as long as a review by his team finds no corruption. And he added: companies must show results, three executives who attended the meeting said.

For U.S. independent Talos Energy, which is developing a high-profile, big offshore discovery announced last year along with partners Premier Oil and Sierra Oil & Gas, Lopez Obrador’s message was clear: quickly bring new streams of production online.

“We know we have to exceed expectations and we’re trying to make sure we do that,” said Talos Energy CEO Tim Duncan, one of the executives who attended the session.

At the Sept. 27 meeting, the president-elect also criticized the 2013 constitutional reform for failing to stop an extended output slide.

Operators such as Talos and Italy’s Eni, which also announced a major offshore find last year, are on Lopez Obrador’s watch list to pump oil quickly, said Carlos Pascual, a former U.S. ambassador to Mexico who now helps run consultancy IHS Markit’s global energy business.

“The focus on increased barrels is going to create greater pressure for some companies,” he said.

The oil and gas blocks awarded in bidding rounds over the past three years to companies including Royal Dutch Shell and Chevron will result in $160 billion in new investment, the outgoing government estimates.

Lopez Obrador’s pick to be the new oil minister, Rocio Nahle, did not respond to a request for comment about Lopez Obrador’s presentation.

  • Reuters
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