AMLO: State Control of Mexico's Energy Industry if Elected

During his presidential campaign tour today, Mexico’s frontrunner, Andres Manuel Lopez Obrador (AMLO) says if elected in July he’ll try to persuade Enrique Pena Nieto to cancel two energy auctions scheduled to take place before the outgoing president leaves office next December.

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This is the first time AMLO, of the National Regeneration Movement (MORENA), explicitly said he would stop Mexico’s oil sector sell off to private and international companies, which was made possible by controversial laws passed by President Peña Nieto and a conservative congress in 2014 that opened Mexico’s energy markets to private companies after eight decades of state management.

The two auctions that AMLO refers to are expected to happen in July and September. The energy minister Pedro Joaquin Coldwell said in early February he’d like to schedule another auction for this month, according to Reuters.

"I'm going to ask (Pena Nieto) that he doesn't hand out any more oil blocks, neither onshore or shallow waters, and that he puts a stop to the privatization of oil and electricity sectors," Lopez Obrador said today on the 80th anniversary of Mexican President's Lazaro Cardenas legislated state control over the country’s energy production, banning foreign investment in the industry.

The presidential hopeful, who is 14 points ahead in polls over his nearest opponent, Ricardo Anaya of the right-wing National Action Party (PAN), announced that within three years of taking office his potential administration would stop buying foreign fuel, stop selling crude internationally, and would upgrade Mexico’s existing oil refining infrastructure.

"We're not going to sell crude oil abroad. We're going to process all the raw material in our country to lower the price of fuel," Lopez Obrador told Mexico City crowds today.

Since 2014 Mexico has conducted eight oil and gas auctions amounting to 90 contracts to drill onshore and offshore. At the end of January, Royal Dutch Shell bought nine out of 19 Gulf of Mexico oil and gas blocks, according to Reuters.

"I'm committed to having stopped buying foreign fuels by midway through the next six-year term, because we're going to rehabilitate the six existing refineries and we will build two big refineries," he told supporters and the press.

It’s unclear exactly what will happen to existing contracts if AMLO is elected and brings back state control over the energy sector.