Mexico’s president on Thursday defended his decision to open the energy sector against attacks from the man currently favorite to succeed him, saying a rollback of the measure could cost the country billions of dollars in lost investment.
The 2013-14 legislative overhaul that ended state oil firm Pemex’s decades-long monopoly was the centerpiece of President Enrique Pena Nieto’s economic agenda, and leftist Andres Manuel Lopez Obrador, who is leading polls for the July 1 presidential election, has threatened to unpick it.
Speaking in the oil-rich state of Veracruz, Pena Nieto said those calling to walk back the reform risked condemning Mexico to an “obsolete” economic model, without naming Lopez Obrador.
“To cancel the energy reform is practically to make disappear the investments that today require certainty,” Pena Nieto said at the inauguration of a technology center. “We want … the private sector to invest, for it to generate returns for Mexico and its people,” he added.
Pena Nieto said over 800,000 jobs and $200 billion worth of investment ultimately depended on the energy reform’s success. He is barred by law from seeking re-election.
Lopez Obrador has pledged to review the oil and gas contracts awarded under Pena Nieto’s government if elected, and on Wednesday evening said his administration would consider unwinding the energy reform legislatively.
Pena Nieto’s reform changed the constitution to grant private operators oil and gas exploration and production rights in a bid to reverse years of declining crude output.
However, the reform coincided with a sharp decline in oil prices, and the government has said it will take time for the shake-up of the energy sector to bear fruit.
Pledging to reduce Mexico’s dependence on policies “sent from abroad”, Lopez Obrador has attacked Pena Nieto’s economic agenda on the grounds that corruption is widespread.
Corruption scandals, lackluster growth and rising violence have battered the government’s reputation.
Later on Thursday, Energy Minister Pedro Joaquin Coldwell told local radio that to undo the energy reform would be “extremely harmful”, and would make Mexico more dependent on natural gas imports, and deny it major tax revenues.
Joaquin Coldwell noted the only body authorized to revoke oil and gas contracts – provided serious violations are shown to have occurred – is the industry regulator, the National Hydrocarbons Commission, not the president.