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LatinNews Regional Monitor: Mexico - 25 July 2018
In brief: Mexico
* Moody’s Investors Service, the international credit ratings agency, has warned that the proposed energy polices of Mexico’s President-elect Andrés Manuel López Obrador will generate risks for Mexico’s state-owned oil company, Pemex. The principal financial risk for Pemex, according to Moody’s, is that posed by López Obrador’s plans to build new oil refineries, given the likelihood of cost overruns which could require the company to take on debt, should the firm be responsible for the building of such refineries. Other risks highlighted include López Obrador’s suggestions that his government may control fuel prices which would increase uncertainty about whether Pemex can continue to take advantage of favourable international oil prices. Moody’s also raised doubts about whether Pemex will have the ongoing capacity to maintain its foreign associations. In response to Moody’s report, López Obrador’s future energy minister, Rocío Nahle, addressed the issue of building more refineries. She reassured that “directing resources into construction and improving the situation of Pemex refineries should not carry any risk” but rather “we need to strengthen the energy sector to address the free market of fuels”.
