• BILL: Notwithstanding the Easter week holiday, President Andrés Manuel López Obrador’s majority in the Lower House will push a bill to reform Mexico’s hydrocarbon law giving the government broader control over the domestic fuel market, potentially shielding state-run oil firm Pemex from competition.
• NATIONALISM: Part of López Obrador’s nationalist drive to favor state-owned energy companies, the bill would allow depriving private fuel market participants of their operating permits when the the government assesses an imminent risk to national security, energy security or the economy.
• IMPACT: “The Initiative, if approved by Congress, may have a significant impact on the development of the midstream, downstream, and retail sectors of Mexico’s oil and gas industry”, law firm Haynes and Boone said in a report noting that the bill does not address compensation to permit holders.
• REVERSAL: Set to be passed in less than four weeks, the bill rolls back part of Mexico’s landmark 2014 energy legislation that opened Mexico’s energy sector to private investment. While domestic litigation is expected, analysts believe that the new bill is likely a breach of provisions contained in the USMCA trade deal.
