Mexican Gov't Impedes Foreign Investment in Energy Sector Fearing Exploitation - Experts

SAN ANTONIO (Sputnik) - The necessary foreign investment needed to tap into the full potential of Mexico's vast oil and gas resources is difficult to attain under the leadership of Mexican President Andres Manuel Lopez Obrador, experts told Sputnik.

"I think President Lopez Obrador is making it very difficult for businesses, investors, for companies to think about Mexico as a friendly business environment place," the Director of US-Mexico Center at Rice University Tony Payan said on the sidelines of the US-Mexico Natural Gas Forum.

"I think the [Mexican] president is a man who thinks the private sector always has exploitative obscure interests and that they're always out to extract resources and they have nothing to contribute to the economy and do well for other individuals and people."

Payan added that Lopez Obrador is co-opting, eliminating or underfunding independent regulatory commissions and rescinding contracts in Mexico's private sector.

"He has closed a lot of business opportunities for the private sector in Mexico and he doesn't intend to open them, particularly in the energy sector but also in many other places," Payan said.

Investors in the oil and gas sectors should plan for when Lopez Obrador is out of office in three years.

"Mexico will be a very different place in ten years and I think it's going to need that [foreign] investment," Payan said. "The new [Mexican] president will have to appeal to investors because I think Mexico does not have the capital, the technology, the know-how to really tap into its own resources. It's going to need foreign aid."

Eduardo Prud'homme, a consultant and former official in Mexico's energy regulatory commission CRE and state-owned petroleum company PEMEX, told Sputnik the current Mexican administration needs to be convinced that opening Mexico's oil and gas industry to foreign private investment is convenient for the country.

"If at some point you convince the Mexican government that it's something they can use as good propaganda that the government is doing things convenient for the country, you have a chance to make things happen inside the government and sit in the table [with] the stakeholders that must be involved," Prud'homme said. "But you need to convince the president in the end."

However, Prud'homme added that unfortunately there is a lot of political contamination in those discussions to welcome foreign investments.