Skip to main content

Pemex CEO: Great energy potential in Mexico

By Nick Parker, CNN
August 14, 2013 -- Updated 1118 GMT (1918 HKT)

(CNN) -- At just 39 years old, Emilio Lozoya has arguably one of the most challenging jobs in Mexico.

The former private equity chief has a staff of 160,000 at the notoriously bureaucratic oil monopoly Pemex. He took the top job last December and is now operating in a politically charged climate of upheaval for the country's energy sector.

He seems to be enjoying the experience.

This week, President Enrique Pena Nieto proposed ending the 75-year old state monopoly on oil to allow private investment -- in a bid to boost Pemex's dwindling reserves.

Watch more: Mexico proposes oil industry reforms

"The way we foresee it is: For the first time the private sector shares the risks with Pemex," Lozoya tells CNN.

"How does it work today? Pemex has only service contracts which means I will hire for hundreds of thousands of dollars an oil platform and I have to pay them regardless whether they find oil or not. And I believe there are better ways of doing business on behalf of the state."

Read more: Natural gas rig burns in Gulf of Mexico

The plan would see constitutional amendments create profit sharing contracts with private oil companies. Potential partners like Exxon Mobil could bring expertise in areas such as drilling in the deep waters of the Gulf of Mexico, where there are an estimated 29 billion barrels of oil.

But crucially, the state would remain the owner of all reserves, something the global "supermajors" may not like. Putting proven reserves on company balance sheets is an important practice.

"They will be able to book the economic interests, but not the subsoil because the subsoil will continue to belong to the nation," says Lozoya.

So they could book what the oil is worth but not actually the oil itself, I ask.

"What the oil is worth when it is extracted. Correct."

As the son of a former Energy Minister, Lozoya has grown up with the sensitivity that surrounds Pemex. Since the appropriation of foreign-held reserves in 1938, the company has been synonymous with national pride and self-reliance.

Any move against the monopoly would always create sections of strong opposition: Street protests are planned in September and tough congressional battles lie ahead.

"I am confident the political forces in Mexico will maybe even enhance what the President has put forward in Congress and we do expect a passage in the coming months," he says.

"Mexico has great potential in the energy landscape. But the reality is that today we are importing a third of the gas we consume. And we have enormous gas reserves. This is an oxymoron. We have to make sure we convert oil and gas into jobs and technology. And this reform allows us to do so."

ADVERTISEMENT
Part of complete coverage on
December 24, 2014 -- Updated 0254 GMT (1054 HKT)
A decade on from devastating 2004 Indian Ocean tsunami, the Red Cross' Matthias Schmale says that the lessons learned have made us safer.
December 24, 2014 -- Updated 0024 GMT (0824 HKT)
As soon as word broke that "The Interview" will hit some theaters, celebrations erupted across social media -- including from the stars of the film.
December 23, 2014 -- Updated 1844 GMT (0244 HKT)
Did a rogue hacker -- or the U.S. government -- cut the cord for the regime's Internet?
December 24, 2014 -- Updated 0106 GMT (0906 HKT)
Monaco's newborn royals, Princess Gabriella and Crown Prince Jacques Honore Rainier, posed for their first official photos with their parents.
December 23, 2014 -- Updated 1706 GMT (0106 HKT)
Tim Berners-Lee, the man credited with inventing the world wide web, gives a speech on April 18, 2012 in Lyon, central France, during the World Wide Web 2012 international conference on April 18, 2012 in Lyon.
What's next for the Internet? Acclaimed scientist Sir Tim Berners-Lee shares his insights.
December 23, 2014 -- Updated 0822 GMT (1622 HKT)
The United States and North Korea have long been locked in a bitter cycle of escalating and deescalating tensions. But the current cyber conflict may be especially hard to predict.
December 22, 2014 -- Updated 2100 GMT (0500 HKT)
A chilling video shows Boko Haram executing dozens of non-Muslims.
December 22, 2014 -- Updated 1134 GMT (1934 HKT)
New planes, new flight tests ... but will we get cheaper airfares?
December 21, 2014 -- Updated 1746 GMT (0146 HKT)
The killing of two cops could not have happened at a worse time for a city embroiled in a public battle over police-community relations, Errol Louis says.
December 22, 2014 -- Updated 0251 GMT (1051 HKT)
The gateway to Japan's capital, Tokyo Station, is celebrating its centennial this month -- and it has never looked better.
December 20, 2014 -- Updated 1621 GMT (0021 HKT)
Unicef has warned that more than 1.7 million children in conflict-torn areas of eastern Ukraine face an "extremely serious" situation.
December 22, 2014 -- Updated 1701 GMT (0101 HKT)
Each day, CNN brings you an image capturing a moment to remember, defining the present in our changing world.
Browse through images from CNN teams around the world that you don't always see on news reports.
ADVERTISEMENT