Mexican president pledges to boost country’s oil and gas sectors

30 Jul 18

Mexico’s newly elected president has pledged to boost the country’s long-neglected oil sector, he announced on Friday.

Andrés Manuel López Obrador has said he is committed to recovering Mexico’s oil and gas output, which has declined over the past 14 years due to a lack of investment and natural reduction of oil fields.  

His’s proposals include a $4bn injection for state oil company Pemex to slash reliance on US fuel imports, it has been reported. 

The cash injection comes as the oil company has seen output slump from a peak of 3.4 million barrels per day in 2004 to 1.886 million in the second quarter this year.

Mexico has imported an average of about 590,000 barrels per day of gasoline and another 232,000 of diesel so far this year, most of it from the US.

The gasoline output at the country’s six refineries owned and operated by Pemex has halved since 2013.

The incoming president, who elected in July and takes office on 1 December, said the output was plunging because the “energy sector and oil industry was abandoned”, and pledged to lift production to 2.5 million barrels per day in two years.

But analysts have warned that the energy policy risks putting unsubstantial pressure on Pemex, the ‘world’s most’ indebted oil company.

López Obrador has yet to set out how the plan will be funded.

He also said that his government would look to increase electricity production by revamping the country’s hydroelectric power stations.

He said: “We’re going to start by modernising hydroelectric plants because we have underutilised infrastructure.

“We are going to generate electricity with the dams that currently exists.”

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