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Weekly Report - 18 July 2019 (WR-19-28)

MEXICO: López Obrador presents Pemex plan

President Andrés Manuel López Obrador presented his government’s five-year business plan for Pemex on 16 July. It entails state investment, including US$8bn to construct the new Dos Bocas refinery, and a reduction in the state-run oil firm’s heavy fiscal burden in a bid to combat high debt levels, improve efficiency and, crucially, boost crude production. On the same day, the new finance minister, Arturo Herrera, insisted during his congressional ratification that rescuing Pemex would be financed through an increase in the tax take rather than a fiscal reform. López Obrador’s refusal to countenance such a reform was one of the reasons given by Herrera’s predecessor, Carlos Urzúa, for his resignation last week. Urzúa gave many more reasons in an extensive interview with the Mexican weekly Proceso this week, including a scathing assessment of the decision to build the Dos Bocas refinery.

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