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Mexico postpones oil auctions until Lopez Obrador takes office



MEXICO CITY-Mexico Oil Regulators postponed oil block auctions scheduled for Monday until February after elected president Andrés Manuel López Obrador takes office.

Auctions for 37 onshore blocks with conventional oil and gas reserves and for nine slate blocks planned for September, and offers to form joint ventures with state oil company Petróleos Mexicanos SA in seven areas were due in October.

Mr. López Obrador won the presidential election on July 1 with 53% of the vote, 30 percentage points more than his closest rival, and will take office on December 1

. His party, the National Regeneration Movement, received a majority in Congressional and Senate House of Commons

The left-wing nationalist criticized the amendments to the 2013 Energy Laws to allow private and foreign investment in oil, and repeated the plans in a post-election speech Verify assigned contracts. Recently, Mr López Obrador did not mention his plans for legislative action, but he did not mention any amendment to the Energy Acts.

He says his government will massively invest in refineries to reduce Mexico's dependence on imports of gasoline and other fuels (19659003) The Department of Energy called for the auction deferral and said that companies had asked for more time to prepare and hope that more companies would participate. The interest in the two auctions was limited and only Pemex registered for the unconventional blocks.

"Let us remember that we will conclude a contract to review the contracts with the new government," said Juan Carlos Zepeda, president of the National Hydrocarbon Commission. "The opening of this space will enable us to accompany the new administration and the transition team in this process."

The delay does not only concern Mr López Obrador, said Gonzalo Monroy, an independent energy consultant in Mexico City]. The auction for the onshore units had some contractual issues, including the environmental liability of Pemex, while the model contract for the slate blocks of one He said the series of companies was considered unworkable and "does not reflect the realities of the industry," he added.

Mexico has so far awarded 107 contracts for onshore, offshore and deep-sea areas as well as joint ventures with Pemex. According to government officials, the contracts could generate around $ 160 billion in investment

The first oil under the contracts is expected to flow in mid-2019.

President

Enrique Peña Nieto,

Whose date runs until November 30, bet on the energy overhaul to restore the country's oil production, which has dropped from 3.4 million barrels a day in 2004 to less than 2 million barrels a day.

Write to Anthony Harrup at anthony.harrup@wsj.com


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