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UPDATE 2-Top Pemex official quits as Mexico oil revamp picks up
February 7, 2014 / 7:30 PM / 4 years ago

UPDATE 2-Top Pemex official quits as Mexico oil revamp picks up

By David Alire Garcia

MEXICO CITY, Feb 7 (Reuters) - In a major leadership shakeup for Mexican oil giant Pemex, just as the ailing state-run energy sector is being pried open, exploration and production chief Carlos Morales has resigned, CEO Emilio Lozoya said in a tweet on Friday.

Morales, head of Pemex’s exploration and production arm since 2004, has stepped down for “personal reasons” and will be replaced on an interim basis by the division’s planning head, Gustavo Hernandez, a Pemex spokesman said.

The change comes after President Enrique Pena Nieto last year pushed through a major overhaul of the state energy sector to open it up to foreign investment, but the leadership change was not expected to mark a shift in the company’s policies.

Mexico is the world’s 10th biggest crude oil producer with 2.5 million barrels per day, but the country has seen output slide by a quarter and exports drop by a third since 2004.

Secondary laws that govern implementation of the energy reform are expected by April. The reform is part of a wider overhaul of the economy, spanning taxes to telecoms, that Pena Nieto hopes will boost competition and long-lagging growth.

“Right now is a key moment for Pemex, and this is actually a bad sign,” said Tony Payan, director of the Mexico Center at Houston-based Rice University. “What this tells me is there may be some internal disagreements playing out.”

Alongside the reforms, Pemex is in the final stages of evaluating which oil and gas fields it aims to keep in a so-called Round Zero allocation.

Pemex was the only entity allowed by the Mexican constitution to exploit the country’s energy riches prior to the reform, which ended the company’s 75-year exploration and production monopoly.

Until a permanent replacement is named by Pena Nieto, Hernandez will oversee the Round Zero allocation process, as well as potential joint ventures with foreign oil majors that the company may seek out after the allocations are set.

Pemex has until March 21 to finalize the list of fields it seeks to keep, and then Mexico’s energy ministry will have six months to determine the company’s technical and financial ability to successfully develop them.

Lozoya told Reuters last month that Pemex will ask to keep all the fields it currently has in development, both onshore and offshore, as well as areas where the company has conducted exploration work and seismic studies.

A top energy ministry official said earlier this month that the first international public tenders for development rights to new fields will take place by the end of 2015 or the beginning of 2016.

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