July 20, 2018 / 1:38 AM / 2 months ago

Mexico business group unhappy about delay in oil auctions

MEXICO CITY, July 19 (Reuters) - A decision to delay Mexican oil auctions until after the next president takes office does not augur well for opening the country’s energy sector to private investment, the head of a major business association said on Thursday.

The government said on Wednesday it had postponed auctions scheduled for September and October until next February to give firms more time to consider the blocks on offer.

Last month, it said the auctions would be going ahead as planned.

Incoming President Andres Manuel Lopez Obrador, a leftist, has been a long-standing critic of opening up the oil and gas sector to private capital, and said before the election he would demand the auctions be halted.

Gustavo de Hoyos, president of employers’ confederation Coparmex, told Reuters that the only conclusion to draw so far was that the postponement was due to political considerations. He said that sent out a signal that was “not good.”

“We think it’s unfortunate that ... political criteria imply an interruption in the rhythm of decisions in the energy sector,” he said in an interview. “Conceptually at least, there’s a clear aversion to this process of liberalization.”

The doubts expressed by de Hoyos are one of the first instances of a major business lobby questioning Lopez Obrador’s economic vision since his landslide victory on July 1.

Coparmex says it represents more than 36,000 business people accounting for about 30 percent of Mexico’s gross domestic product.

Its reservations could presage further pushback against Lopez Obrador after he takes office on Dec. 1 if doubts surface over his stewardship of Latin America’s No. 2 economy.

The president-elect clashed with prominent industry leaders during the campaign, but top business executives quickly pledged to work with him after his election win.

Lopez Obrador has said little about the oil auctions since his victory. Senior members of his campaign team did not respond to questions about whether the postponement was agreed between the incoming and outgoing administrations.

Current administration officials said it was up to Lopez Obrador’s team to say whether there had been a mutual agreement to delay the auctions. Outgoing President Enrique Pena Nieto says they will generate billions of dollars worth of investment.

Lopez Obrador has pledged to review contracts awarded under the oil and gas liberalization for evidence of corruption, and his designated chief of staff said before the vote the auctions would continue if the process was not tainted. (Reporting by Dave Graham and Ana Isabel Martinez; Editing by Peter Cooney)

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