Second-Tier Reshuffle at Pemex: Policy Outlook

By February 2018Mexico

Pemex CFO Juan Pablo Newman and Deputy Director of Procurement Jose Manuel Lofte Soto resigned their positions, causing speculation in the media about possible changes to the NOC’s policies. Soon afterward, news emerged that both men had been nominated for second-tier positions in the Ministry of Finance (SHCP). Indeed, Congress approved their appointments on 23 January.

After President Enrique Pena Nieto designated then Pemex CEO Jose Antonio Gonzalez Anaya as finance minister on 27 November, no personnel changes were made at the SHCP for several weeks. However, in early January, the opportunity arose for Gonzalez Anaya to replace seven figures in his ministry – partly to support the looming government handover at the end of Pena Nieto’s term. Unsurprisingly, Gonzalez Anaya sought to recruit some of his trusted Pemex subordinates. Newman, who played a key role cleaning up the NOC’s finances, will now lead the SHCP’s Public Credit Unit, while the reliable Lofte Soto will head the SHCP’s coordination with state governments.

Newman’s departure as CFO necessitated a prompt replacement. Thus, even though Pemex CEO Carlos Trevino was promoting business opportunities with international firms at the World Economic Forum in Davos, he appointed David Ruelas Rodriguez as acting CFO on 24 January. His appointment was made official on the following day. Ruelas Rodriguez, an experienced technocrat who joined Pemex in 2002, will continue the actions taken by Gonzalez Anaya and Newman to clean up the NOC’s finances.

Meanwhile, Lofte Soto’s resignation is not likely to have a significant impact on the Sub-Directorate of Procurement. That entity implements decisions made by Director of Procurement and Supply Miguel Angel Servin Diago, who has undertaken decisive actions to clean up Pemex’s procurement procedures and relations with suppliers. In fact, Lofte Soto’s departure may be an opportunity for Servin Diago to work more effectively, since he could propose the right person to fill the vacancy. According to our contacts, an official from within the Directorate of Procurement and Supply such as Jose Luis Antonio Gomez or Luis Fernando Jordan could very well replace Lofte Soto, but the Board of Directors has not yet decided on the matter.

Overall, the reshuffle will not disrupt Pemex’s policies, in our assessment. It might even accelerate the NOC’s efforts to meet its business plan objectives, with further actions taken to attract investment despite uncertainty over the upcoming elections and renegotiation of NAFTA.