AMLO Says Private Oil Output Not Yet Enough to Restart Auctions

(Bloomberg) -- Mexican President Andres Manuel Lopez Obrador said that oil output from private companies hasn’t risen to a level that would justify restarting auctions that his administration put on hold.

Lopez Obrador said private companies are only producing 4,000 barrels of crude per day, based on the information he has from state-owned oil company Petroleos Mexicanos. As of two weeks ago, DEA Deutsche Erdoel said on April 15 that production from its well Zama-2 well had climbed to 7,900 daily barrels of crude oil equivalent.

AMLO, as he’s known, said that even given that level, production by private firms would be very low for an overhaul whose details were approved in 2014. The 65-year-old leftist has questioned predecessor Enrique Pena Nieto’s strategy to attract private and foreign investment to the oil industry, stopping oil field auctions and focusing on strengthening Pemex.

"Eight thousand barrels for the energy reform, after four years, when they talked about how we would be producing 3 million barrels a day, is very little," Lopez Obrador said at his morning news conference on Thursday. "So we’re going to wait more time. And we’re not reviewing nor are we canceling any contract. We’re honoring our word to keep the contracts and calling on the companies that have contracts to invest and produce."

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