Mexico’s energy reform will likely continue under President-elect Andrés Manuel López Obrador but one expert expects policy shifts in certain areas, including more upstream partnerships with the country’s national oil company, Pemex, and fewer outright contract awards.

Luis Gomar, Mexico City- and Houston-based partner with Thompson & Knight LLP, told Hart Energy that he takes a wait-and-see approach on the policies López Obrador will enact after taking office. However, he is heartened by the newly elected president’s softening of positions toward private industry late in the campaign.

“I think that energy reform has been found by everybody to be positive as far as investment is concerned,” Gomar said. “I think that the new government will find that the awards have been ordered very transparently, that the economics associated with the awards granted are very positive.”

López Obrador’s victory may have been expected, but few could have anticipated that he would defeat his three opponents so easily by capturing 53% of the vote.

“Whoever tells you that they’re not surprised at how lopsided the vote is, is lying,” Gomar said. “That tells you something about the sentiments of the country. What it says is, it’s not that the country wants to go left. What it tells you is, the country is tired of the people who have been governing since 2000. It was a direct response to people being tired of the constant corruption scandals, the constant issues associated with corruption.”

A change of leadership in Mexico should not alter its basic relationship with the U.S., Energy Secretary Rick Perry said last week at the World Gas Conference in Washington.

U.S. Energy Secretary Rick Perry

“Regardless of your political leanings, you’re going to need resources to address the needs of your country and your citizens,” said Perry, who referred to Mexico as a good neighbor. “The most powerful way, the most expeditious way to address resources coming into the country, in this case the creation of pesos, is in the energy sector.”

Perry spoke at a press conference to announce an initiative from the Overseas Private Investment Corp. and the Department of Energy to mobilize $1 billion in investment for Mexico’s energy sector over the next three years.

Mexico’s new administration will continue to support midstream development, Gomar said, because it really has no other choice.

“There are substantial infrastructure needs in Mexico,” he said. “There is a need to invest in pipelines, to invest in the flow of natural gas. Regardless of the regime that is in place, that continues to be the reality of the country.”

Gomar expects the new government to modify regulations for the pipeline open season market.

“There will be a tightening of the permitting,” he said, “but I think, ultimately, they will continue because they are so desperately needed.”

While some policies espoused by the left-leaning Mexican president-elect make many nervous on both sides of the border, Gomar said there are also opportunities present in the myriad of challenges facing the incoming government.

“He’s got control of Congress,” he said. “He is in a better position than anybody else in the last 18 years to really do something. That could be dangerous, in and of itself, but it could also be very positive if you take him at face value and think that he is willing to do what is necessary to do to move the country forward.”

But the challenges facing López Obrador—significant security concerns, infiltration of drug cartels into the political system, difficult negotiations regarding the North American Free Trade Agreement—are immense. And Venezuela in the process of imploding, he said, is a perfect example of what a bad regime can do.

“As you look at Mexico and you try to decide: Is Obrador another [Hugo] Chávez or [Nicolás] Maduro [of Venezuela], or is he more of a [Luiz Inácio Lula da Silva] in Brazil with Lula’s concept of socialist capitalism, you hope that he follows more in the Lula footsteps,” Gomar said. “You hope that he does do something about corruption. You’ve got to hope that he does do something about that and in a way that does not destroy the institutions that run the country.”

Joseph Markman can be reached at jmarkman@hartenergy.com and @JHMarkman.