Tabasco Agustín Díaz Lastra is the new head of the CNH

President Andres Manuel Lopez Obrador appointed a former official from state oil company Pemex to lead the oil regulator, whose predecessor abruptly resigned last month well before his seven-year term was up.

Agustin Diaz Lastra became the head of the National Hydrocarbons Commission (CNH), the regulator said in a statement on Friday. His appointment comes at a critical time for the Mexican energy sector and the regulatory authority itself.

Under the mandate of its predecessor, Rogelio Hernández, which was to last until 2026, the CNH repeatedly clashed with Pemex, the Secretary of Energy yes AMLO.

The oil regulator tried to fine the oil company for not complying with its own development plans for the priority Ixachi and Quesqui fields, which caused excessive natural gas flaring.

CNH has also resisted approving a Pemex proposal on how to develop the Lakach deepwater natural gas field.

López Obrador has sought to give Pemex a preferential role in the country’s energy market since he took office at the end of 2018.

The CNH evaluates and approves exploration and production plans for all energy companies, including Pemex, and held a series of oil auctions before López Obrador froze them shortly after taking office.

Lastra is a former Pemex official who also held positions in the Tabasco state government, where López Obrador is from, including health, commerce and tourism.

Last month, Lastra highlighted during a hearing before the senate energy committee the importance of investing in new technologies to optimize exploration and production in the country.

AMLO has put intense pressure on Pemex to reverse a decade of declining output, while investors and rating agencies have sounded alarm bells over its poor environmental, social and governance record.