How the policy of zero discretionality backfired

SHCP awards in Round One – How the policy of “zero discretionality” backfired

Round 1 - Market 076MARKET COMMENT 076 (HOUSTON) — The auction of 14 offshore blocks on July 15, 2015, by officials from the Hydrocarbon Commission (CNH) was an historic first in Mexico’s century long history as an oil exporter. That it went well is to the credit of the Peña Nieto administration; but the blame for the failure of 8 of 14 blocks to receive bids goes primarily to the Finance Ministry (SCHCP), which, by law, set the bidding parameters for the auction. The report asks: What went right and what went wrong? What lessons are to be derived from this first auction of petroleum blocks? A summary of the arguments has been prepared for a column in MILENIO (La Energía de Baker) with the title “El Exito y las Moscas de la Ronda Uno.”

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Written by

George Baker

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.

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