Mexico's incoming presidential administration is going to respect the autonomy of the country's National Hydrocarbon Commission (CNH), although the future of the country's ongoing energy reforms will be evaluated, according to Rocio Nahle, the new energy secretary.
Mexico internationalized its oil and gas sector, and the country requires a strong regulator to monitor the contracts and tenders awarded to date, she said Wednesday at a webcast celebration on CNH's 10th anniversary.
Nahle said she hoped all contracts awarded will help increase Mexico's production, as it has fallen to 1.78 million b/d in October. However, the incoming administration is concerned that many operators might be unable to assess all the acreage they have won.
According to Mexico's Energy Secretariat (SENER), if the 107 areas awarded to date are geologically successful, they will produce 180,000 b/d by 2020, 430,000 b/d by 2024 and 816,000 b/d by 2030.
President-elect Andres Manuel Lopez Obrador, who takes office Saturday, will decide the future of the country's energy reforms in the mid-term, Nahle said. "In two years, we will determine if we continue through this path or if we go to a more intense road or if we go to another route," Nahle said.
Nahle said that CNH and other regulatory bodies would maintain their professional independence, dismissing rumors published in the Mexican media that they would not. However, SENER will have direct coordination with regulators as energy reforms go forward, she added.
"We aren't going to change the law. To many, we would like to change it and to others not, but we will act responsibly for the country, the oil production and the industry," Nahle said.
A LEVEL PLAYING FIELD
Going forward in its evolution, CNH expects to face new challenges, multiple regulatory officials said. The commission must ensure a balanced playing field continues in the future, Juan Carlos Zepeda, CNH's president commissioner, said Wednesday.
"The regulators could be pressured to attend first to the permits from state enterprises, and put the other companies behind in the queue," Zepeda said. "We have to tell Pemex and CFE regarding regulatory permits: 'You have the same rights as other companies.' "
The commission must protect a permitting process based on the first come, first served system, he added. This is a challenge not only CNH and the upstream sector will face but also Mexico's Energy Regulatory Commission (CRE) and Agency for Safety, Energy and Environment (ASEA) and their overview of the power, gasoline and natural gas markets.
The incoming administration has pledged to streamline the regulatory process while strengthening Pemex and CFE as central actors in the country's energy sector.
"A new government comes that will define a new energy policy, which isn't something bad, but different," Zepeda said.
NEXT FOCUS: STREAMLINING THE REGULATION
The regulator was created in 2008 to bring accountability to Pemex as there was little transparency about how the state company invested its funds or the real volume of Mexico's hydrocarbon reserves, Javier Estrada Estrada, a former CNH commissioner, said Wednesday.
Now the commission's challenge is to oversee contracts and evaluate their results as well as assess all of Pemex's activities, Estrada said. In addition, the commission must promote the use of new technologies such as big data and automatization, he said.
"The future of the commission is not in this stage of opening and bringing new participants but seeing the results of good regulation that will result in increasing output," Estrada said.
The regulator began by adopting many of the best international practices when it was created, which led to a bloated regulatory system that needs to be streamlined, Carla Gabriela Gonzalez, CNH's executive secretary, said Wednesday.
"Today Mexico has become a new international standard for hydrocarbon tenders," Gonzalez said. "Now we must enhance the regulatory process and review the time framework and permit requirements."
