July 27, 2018 / 6:08 PM / 10 months ago

Lopez Obrador seeks to boost Mexico oil output to 2.5 million bpd from 1.9 million

Mexico's president-elect Andres Manuel Lopez Obrador talks to the media next to his pick Energy Minister Rocio Nahle and Pemex's next chief executive Octavio Romero, at his campaign headquarters in Mexico City, Mexico July 27, 2018. REUTERS/Carlos Jasso

MEXICO CITY (Reuters) - Mexican president-elect Andres Manuel Lopez Obrador said on Friday his administration will look to boost the country’s crude oil production to 2.5 million barrels per day (bpd) from 1.9 million bpd now.

Lopez Obrador, elected in a landslide July 1 victory and who will take office on Dec. 1, has said he is committed to expanding Mexico’s oil and gas output, which has declined steadily over the past 14 years due to a lack of investment and natural depletion of oil fields.

The leftist leader said he will look to revamp the nation’s six refineries so they are operating at full capacity within two years, and plans to build a new refinery in Dos Bocas in Mexico’s southern Tabasco state with an investment of 160 billion pesos ($8.6 billion) over three years.

“With this new refinery and the rehabilitation of the six that already exist we’re going to make good on our campaign promise of stopping purchases of gasoline abroad and of lowering fuel prices by the middle of (my) six-year term,” he said.

Mexico has imported an average of about 590,000 barrels per day (bpd) of gasoline and another 232,000 bpd of diesel so far this year, almost all of it from the United States, as gasoline output at the country’s six refineries owned and operated by state-run Pemex [PEMX.UL] has halved since 2013, the first year of outgoing President Enrique Pena Nieto’s term.

He tapped Rocio Nahle, who also won a Senate seat in the election, to be energy minister and named Octavio Romero Oropeza to be Pemex’s next chief executive.

Lopez Obrador said his government would look to increase electricity production by revamping Mexico’s hydroelectric power stations.

“We’re going to start by modernizing hydroelectric plants because we have underutilized infrastructure. We’re going to generate electricity with the dams that currently exist,” he said.

Lopez Obrador said he expects his administration to invest 175 billion pesos ($9.4 billion) next year to strengthen the energy sector.

Reporting by Anthony Esposito and Adriana Barrera; Editing by Michael O'Boyle and James Dalgleish

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