Mexico’s fight against renewable energy: the story so far
When Andres Manuel López Obrador was elected president of Mexico in July 2018, he promised to return the country’s energy companies to their former glory. Since then, his policies have turned away renewable investment and prompted an internal legal struggle.
In his first speech following election, President Lopez Obrador touched on his desire for energy reform. This would involve helping state-owned oil company Petróleos Mexicanos, known as Pemex, as well as national energy company CFE. Pemex in particular used to have significant influence and investment, but banks now consider it ‘junk grade’.
ICIS Mexico Energy Report editor Claudia Espinosa said at the time: “This focus is currently perceived by most energy market participants as being to the detriment of wider energy policy formation, implementation, and economic benefit to the nation.”
The president started by suspending auctions for offshore exploration licenses until at least 2022. This limited foreign investment, favouring Pemex. The government then agitated current investors by attempting to renegotiate existing contracts.
These moves scared foreign investors, and American and European governments sent diplomats to Mexico to reason with lawmakers.