Mexico Slowly Bringing Oversight To Its Oil Industry

Robert Hune-Kalter - Talk Radio News Service

The head of a new agency within the Mexican government tasked with regulating carbon extraction said Mexico will soon be getting tougher on its largest state-owned oil company.

Juan Carlos Zepeda Molina, President of the newly created National Commission of Hydrocarbons, told a panel gathered at the Center for Strategic and International Studies in Washington, D.C., that his department will bring necessary oversight to Pemex, one of the largest companies in the world, worth hundreds of billions of dollars annually.

(Click here for a more in-depth article from the Wall Street Journal)

“Our main focus right now, is to go into Pemex and check whether Pemex has all internal procedures according to best practices. The second thing is to assign a specific regulation. The third level of regulation, as I mentioned, we have the technical assessment,” he said.

One procedure Molina finds to be of the utmost importance is to implement a double-key authorization.

“Before a critical decision is taken, I believe we have to enforce a double-key procedure to make sure certain procedures are done and that you have the concourse of more than one judgement in order to take a final decision,” said Molina.

Lourdes Melgar, an independent energy consultant studying at the Woodrow Wilson Center in Washington, D.C., worries that Pemex has future offshore drilling plans that exceed the company’s technologies and practices.

“How does a company such as Pemex, and how do we think we can do this with such a weak regulation or nonexistent regulation, do the quantum leap from 1200 meters to 2520 meters?” said Melgar.

Melgar also worries about Mexico’s lackadaisical response to the oil spill in the Gulf of Mexico.

“One cannot just pretend nothing is going on,” she said. “Why has the Mexican government been so quiet about something that is happening right there in the Gulf of Mexico? After all it’s called the Gulf of Mexico, it’s something we share.”