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Outgoing U.S. officials slam Mexican energy policy for bias

FILE PHOTO: Mexico's Energy Minister Rocio Nahle attends a news conference at the National Palace in Mexico City, Mexico, December 9, 2019. REUTERS/Edgard Garrido

MEXICO CITY (Reuters) - A letter signed by three of outgoing President Donald Trump’s top officials sharply criticizes the Mexican government’s energy policies for what it describes as damaging the “investment climate” in the country due to bias against private companies.

The Jan. 11 letter is addressed to three Mexican ministers, including Energy Minister Rocio Nahle, and warns that actions taken by the government of President Andres Manuel Lopez Obrador could threaten hundreds of millions of dollars in investments in the sector by U.S. government lenders.

The letter is signed by the U.S. Secretary of State, as well as the country’s commerce and energy secretaries, all of whom are set to leave office next week after President-elect Joe Biden formally takes power.

Specifically, the U.S. officials criticize the Mexican government for instructions to regulators that “allegedly instructed (them) to block permits for private sector energy projects” in addition to using their power to unlawfully favor government-owned energy companies.

“If true, this would be deeply troubling and raise concerns regarding Mexico’s commitments under the USMCA,” the U.S. officials wrote, referring to the new North American trade pact enacted last year that includes investor protections.

In Mexico, state oil giant Pemex and national electricity company CFE dominate their respective sectors despite no longer holding monopoly power.

U.S. energy companies have expressed concerns about extended delays on permit approvals for retail fuel stations, as well as efforts by Pemex to wrest away operational control of a big shared crude deposit discovered by a U.S.-led consortium three years ago, among other criticisms of the state-centric energy policy pursued by Lopez Obrador.

Mexico’s leftist president has pledged to strengthen state-run energy companies while simultaneously canceling new investment opportunities for foreign and private firms.

Nahle’s office did not immediately respond to a request for comment, but in a post on Twitter on Friday she defended “an appropriate energy balance” in the country.

Reporting by David Alire Garcia, Editing by William Maclean

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