Jarrett Renshaw, Reuters

MEXICO CITY/WASHINGTON
EnergiesNet.com 01 12 2023

The Biden administration contacted U.S. energy companies ahead of this week’s North American summit to ask them how Mexico’s protectionist policies have impacted their business operations there, according to a document seen by Reuters.

U.S. President Joe Biden and Mexican President Andres Manuel Lopez Obrador failed to resolve a running energy dispute during two days of talks that ended on Tuesday.

However, the inquiry provides fresh insight into the administration’s strategy to resolve the dispute with Mexico over its efforts to give priority treatment to cash-strapped state energy companies at the expense of private outside investors.

The State Department sent an email to U.S. energy companies last week asking them how many permits and applications they had applied for in Mexico over the past three years, identify which ones were denied, and list any projects shelved due to the “permitting challenges.”

The query shows the Biden administration was looking to arm itself with details it could use in talks with Mexico as it seeks to demonstrate the country is flouting a regional trade agreement and potentially stunting its own economic growth in the process.

Officials at the State Department and the American Petroleum Institute, the U.S. oil industry’s main trade group, did not immediately respond to a request for comment.

Lopez Obrador has moved aggressively to redraw energy sector rules for the benefit of state oil company Petroleos Mexicanos (Pemex) and public power utility Comision Federal de Electricidad (CFE), arguing past governments skewed the market in favor of private capital.

Oil and gas companies such as Exxon Mobil Corp (XOM.N), Valero Energy Corp (VLO.N) and Marathon Petroleum Corp (MPC.N) have since struggled to get permits and applications approved or renewed in Mexico, according to multiple interviews with U.S. energy officials.

U.S. Ambassador to Mexico Ken Salazar has said American companies have invested more than $30 billion in the Mexican energy sector.

Washington and Ottawa believe Lopez Obrador’s actions breach the United States-Mexico-Canada (USMCA) trade deal, and have launched dispute resolution proceedings against Mexico.

Reporting By Jarrett Renshaw Editing by Marguerita Choy

reuters.com 01 12 2023