LatAmOil: AMLO’s latest salvo

Mexican President Andres Manuel Lopez Obrador has reportedly stepped up his campaign to secure state control over the energy industry. According to Reuters, the president has sent a bill to Congress that gives the government the right to suspend permits granted to the developers of oil and gas fields under certain conditions. A section of the draft legislation cited by the news agency states that the Secretariat of Energy (SENER) or the Energy Regulatory Commission (CRE) may suspend such permits temporarily “when an imminent danger is foreseen for national security, energy security or for the national economy.”

The bill is likely to unnerve the international oil companies (IOCs) that secured access to Mexico’s hydrocarbon reserves after Lopez Obrador’s predecessor, Enrique Peña Nieto, reformed the energy sector in 2013-2014. The current president has been working to blunt the impact of these reforms, which loosened state-owned Pemex’s long-standing monopoly control over the oil and gas industry. He has also stated explicitly that he believes government-run companies should take a leading role on this stage.