Mexico regulator to private sector, advisory: Update

Adds comments from commissioner Porres, other details.

Juan Carlos Zepeda has stepped down as president of Mexico's oil regulator CNH and will take up a position in fund management while concurrently serving as external adviser to incoming energy minister Rocio Nahle.

Zepeda, who served almost ten years at the helm of CNH, will step down as of 1 December, even though his term was not due to end until May 2019.

Zepeda will take up a position at an unnamed fund management company specializing in infrastructure and energy projects starting next year and will also act as external adviser to the energy secretary following an invitation from Nahle.

CNH commissioner Hector Acosta's term is due to end on 1 December, so the commission will operate with just five commissioners instead of the usual seven, commissioner Alma Porres told Argus.

"We will continue to work as normal," Porres said.

The new commissioners will be appointed by incoming president Andres Manuel Lopez Obrador once he takes office on 1 December.

Zepeda oversaw CNH's role in opening the upstream sector to private companies following the 2014 energy reform that ended state-owned Pemex's monopoly.

Since 2014, CNH has held three main upstream rounds for onshore and offshore blocks, as well as three farm-outs in which Pemex has partnered with the private sector to develop acreage awarded under the reform. More than 100 contracts have been signed with 73 companies from 20 countries, while total investment is expected to reach $161bn if all licenses prove viable, CNH said.

"Transparency and accountability have been our guiding values in CNH and, consequently, we have been able to establish transparency standards that are internationally recognized as best practice," Zepeda said.

Lopez Obrador, known as AMLO, has frequently criticized the energy reform for failing to deliver on promised investment and increases in domestic production. Pemex produced 1.83mn b/d crude in September, up by 0.5pc on August and up by 5.5pc from 1.73mn b/d from the same month of last year.

"The exploration and production industry isn't politics. It has a technical basis and each project has different periods of maturity," Porres said.

It's impossible to expect a large uptick in production so soon after the tender rounds, especially in deep water blocks that take up to ten years to start production, Porres said.