Pena Nieto axes Pemex CEO, orders cuts amid oil slump

Instructions have been ordered that all Pemex units must become more profitable.
Instructions have been ordered that all Pemex units must become more profitable.

By Gabriel Stargardter, Ana Isabel Martinez / Reuters

Mexican President Enrique Pena Nieto on Monday removed Emilio Lozoya, the head of ailing state-oil firm Pemex, replacing him with the country’s social security chief whom he tasked with cutting costs amid a global oil rout.

A close ally of Pena Nieto, Lozoya became Pemex CEO in December 2012, overseeing the company during a momentous energy reform that ended Pemex’s decades-long monopoly over the country’s oil and gas sectors.

However, his term coincided with a sharp fall in the price of oil, which, along with years of declining production, has led to record losses and drastic cost-cutting measures.

“I’ve given instructions to the new director to make the efficiency and profitability of all Pemex’s activities his top priority, with an emphasis on its international competitiveness,” Pena Nieto said at a press conference in Mexico City.

“It will be necessary to adjust the cost structure, revise the spending program and strengthen the investment processes, making use of the new joint venture and investment schemes provided by the energy reform.”

Pemex’s new boss, Jose Antonio Gonzalez, has been the director of Mexico’s Social Security Institute since 2012. Mikel Arriola, the head of health regulator Cofepris, will replace him, Pena Nieto said.

Mexican Finance Minster Luis Videgaray, who is said to have had a frosty relationship with Lozoya, said that Pemex’s board would announce fresh budget cuts in the coming days due to the slump in oil prices.

http://www.rigzone.com/news/oil_gas/a/142956/Mexicos_Pena_Nieto_Axes_Pemex_CEO_Orders_Cuts_Amid_Oil_Slump

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