Mexican presidential front-runner Andrés Manuel López Obrador wants to wind down oil exports, build refineries capable of replacing American gasoline imports and halt deepwater auctions.
That emphasis on national self-sufficiency contrasts to the ethos of a sweeping 2013 energy reform, passed under President Enrique Peña Nieto, which opened reserves to significant foreign investment for the first time in several decades.
"We cannot irresponsibly deliver our oil reserves to the transnational companies," Rocio Nahle, a former legislator and chief energy adviser to López Obrador, said in a Twitter post this month after a visit to the oil-rich city of Poza Rica. "This July 1, this town will end the looting of Mexico."
That might be bad news for U.S. Gulf Coast refiners designed to handle heavy crude, with imports from Canada and Venezuela facing new limitations. The loss of crude imports from Mexico — about 8 percent of the total — would hit refiners' profits by forcing them to overhaul equipment or undertake a switch to less efficient light oil.
Natural gas exports to Mexico, which were at some 4.5 billion cubic feet per day, are also at stake.
Those deliveries help relieve a supply glut in the Permian Basin, meaning if Mexico stops buying, producers will either have to flare more or produce less.
"Mexico is very critical as an energy partner of the United States, so a retreat from current policies would be a tragedy for both countries," said Scott D. Sheffield, chairman of Texas oil and gas producer Pioneer Natural Resources Co. "It's going to hurt Mexico long term and the United States long term" (Clifford Krauss, New York Times, April 26). — DI