Mexican president pitches law that could suspend oil permits

Mexican President Andres Manuel Lopez Obrador sent a bill to Congress on Friday that could enable the government to suspend permits in the oil industry, as part of a drive to bolster state control of energy at the expense of private firms.

Lopez Obrador argues previous administrations skewed the energy market in favor of business interests and were intent on carving up national oil firm Petroleos Mexicanos (Pemex) and power utility the Comision Federal de Electricidad (CFE).

His new initiative, a copy of which was seen by Reuters, set out a series of measures to strengthen state influence over the oil and gas industry and said the government should have the right to suspend permits if a threat to Mexico is perceived.

According to the draft bill, the energy ministry or the energy regulatory commission could temporarily suspend permits "when an imminent danger is foreseen for national security, energy security or for the national economy."

The bill did not detail what constituted such circumstances, and said a permit holder could ask for the suspension to be lifted once it showed that whatever led to the suspension had been "corrected or eradicated, or have disappeared", unless there were also criminal or administrative offenses.

Lopez Obrador this month pushed through a change in the electricity law that gave the CFE precedence over private sector players in crucial aspects of the power market.

He is pressing private power companies to negotiate with the government in the hope that he can secure better terms and savings for the state from existing contracts.

His shake-up of the market has upset business groups and many of Mexico's top trade partners, who are concerned the government is not respecting investments.