![]()
In late 2016, to avoid racking up fines for burning too much natural gas, Mexico's state oil company Pemex struck a deal with the regulator to invest more than $3 billion to fix its flaring problem at its most productive set of oil fields. But 5 years on, the little-publicized project has been abandoned, according to three sources with direct knowledge of the matter, and the environmental toll at the Ku-Maloob-Zaap offshore fields in the Gulf of Mexico continues to rise. The broken commitment, which has not previously been reported, highlights the struggles of Mexico's oil regulator to rein in Pemex, a powerful state monopoly that is always closely connected to the government. It also shows how, while countries like Colombia, Kazakhstan and Nigeria have cut flaring by investing in infrastructure and strictly enforcing penalties, Mexico is heading in the opposite direction. Pemex opted to drop the plan half way through completion, the three sources said, as low gas prices made it less economically attractive and political priorities shifted to raising oil output.