In the Headlines
July 10, 2018

Mexico Could Complete Contract Audit by H2 2019

Mexico’s president-elect has pledged a full audit of E&P contracts that could be overseen by members of congress or energy ministry officials, according to a prominent lawyer
Interfax Natural Gas Daily

According to Partner José Prado, an audit of over 100 oil and gas exploration and production contracts awarded in Mexico's recent auctions could be concluded by H2 2019. Mr. Prado—who was formerly a lawyer with the country's energy ministry, SENER, and served as legal chief compliance and internal affairs officer for state-run Pemex—told Interfax Natural Gas Daily that an audit could take about six months to complete and would begin when the new president-elect, Andrés Manuel López Obrador, takes office in December.

"They will need to go through the process contract by contract, then draft a report," stated Mr. Prado, skeptical that simply auditing the contracts will actually uncover anything substantial. "We still don't know what the parameters of the audit will be, and how they could establish any corruption was involved—it's not very clear. [...] Frankly, this looks like pure politics."

Mr. Prado also noted that López Obrador's coalition will control three-fifths majority of the seats in Mexico's Chamber of Deputies and the country's Senate, which will allow him to easily modify and repeal any law. Furthermore, if defections occur in the future, the president could even enjoy a two-thirds majority, which would allow him to change the country's constitution. However, Mr. Prado believes the new president will not, "at least in his first term," opt for such a huge overhaul of those energy reform laws.

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