Mexican arbitration risk builds

Opportunities for foreign investment are being squeezed as authorities strive to roll back energy reforms

Short-term energy market risk is largely on a downslope globally, as vaccinations promise an end to the Covid nightmare in many parts of the developed world and oil prices continue to be buoyant. But in Mexico, government intervention poses a growing critical threat for the private sector. President Andres Lopez Obrador is finally unwinding his country’s landmark energy reforms, and arbitration is already on the cards for many. And discrimination in favour of Mexican state firms has been escalating. “Making the monopoly strong again is their mantra” Lopez Velarde, Ritch Mueller First, the government passed an electricity reform boosting state-owned utility the Federal Electricity Com