Daily Times

Mexican President-elect Andres Manuel Lopez Obrador has been a harsh critic of the landmark energy reform that privatized the country’s oil sector, but the anti-establishment leftist will need it more than he realizes, analysts say.

Lopez Obrador, who won a landslide victory in Mexico’s July 1 elections, is famous for bashing the 2014 reform, which ended a 76-year monopoly by state oil company Pemex and reopened the sector to private companies.

He once called the reform, one of outgoing President Enrique Pena Nieto’s proudest achievements, an act of “treason” comparable to the agreement to fork over half Mexico’s territory to the United States after the Mexican-American War in 1848.

The new president is nostalgic for the days when Mexico was the world’s largest oil exporter a century ago, and the nationalization of the sector in 1938 — an event still glorified with monuments and annual celebrations.

But he will need the private investment he was so fond of criticizing on the campaign trail if he wants to fulfill his promises to restore the ailing Pemex to its glory days and make Mexico self-sufficient in gasoline for the first time in years, according to energy experts.

Pemex was long seen as a cash cow by the Mexican government, which depended on the company’s revenues for more than a third of its budget.

Weighed down by heavy taxes and unable to invest enough in production, the firm has struggled with declining production for years — from a peak of 3.4 million barrels per day in 2004 to around two million this year.

Mexico has meanwhile fallen to 15th place on the list of world oil exporters.

Published in Daily Times, July 20^th 2018.