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 News Around the Republic of Mexico | January 2008 
Mexico Senate Sees April Energy Law Proposal
 Catherine Bremer - Reuters
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 |  | Along with Canada, Saudi Arabia and Venezuela, Mexico is one of the top four suppliers of crude to the United States. |  | | | |
Mexico City – Mexican senators expect to have a proposal ready in April for an energy reform aimed at revitalizing the sector and possibly bringing vital deepwater oil in the Gulf within reach, a senior legislator said.
After a year consulting with Mexican and foreign experts, lawmakers from all parties agree the oil sector needs a shake-up to ensure Mexico's future as a world class oil exporter, Sen. Ruben Camarillo told Reuters.
Camarillo, a member of the ruling National Action Party, or PAN, and secretary of the Senate Energy Committee, said his party hoped the law would let investment-starved state oil monopoly Pemex form private-sector alliances to bolster activities like exploration and oil refining.
Even leftists opposed to private investment may agree to let foreign partners help Pemex drill in Gulf of Mexico oil fields sitting on the U.S. boundary, helping boost flagging output and reserves in the world's No. 9 oil exporter.
“I estimate it should be during the month of April,” Camarillo said, referring to when the senate committee would have a draft proposal ready to submit. Some lawmakers had seen a bill ready by end-February but most feel more time is needed.
“This month and the next one we will most likely still be in the debating stage to try and put out a single initiative ... that all parties can sign,” Camarillo said.
The reform attempt will be conservative President Felipe Calderón's most ambitious yet since he took office a year ago and shook up Mexico's pension, fiscal and justice systems.
Tampering with the oil sector, under state control since foreign firms were booted out in 1938, is a political hot potato. The PAN lacks a majority in Congress and so would need backing from at least one of two main opposition parties.
“I hope we can all agree, I don't know whether it will be on 50, 60 or 70 percent of the points ... But we will put down all the issues where we agree and put out one single initiative in the name of the energy committee,” Camarillo said.
CONSTITUTION LEFT ALONE
All parties agree on not selling any part of Pemex, and basic ideas such as granting Pemex more autonomy and setting up an independent energy regulator are widely supported.
On the more controversial topic of strategic alliances, the centrist Institutional Revolutionary Party, or PRI, says it is open to discussion, but the left-wing Party of the Democratic Revolution, or PRD, is dead against the idea.
An exception may be in cross-border offshore fields, where many worry Mexican oil will be sucked over to the U.S. side by drilling there, unless Mexico moves fast to start production.
“There's no way the reform in its totality will pass. It's controversial in the PRD,” said Fluvio Ruiz, an advisor to PRD deputies on energy. “But the cross-border part has a chance. The PRD has people who think it's absolutely necessary.”
Along with Canada, Saudi Arabia and Venezuela, Mexico is one of the top four suppliers of crude to the United States.
Yet years of crippling taxes and the ban on joint ventures has left Pemex lagging behind its rivals. Energy Minister Georgina Kessel said recently Mexico's oil output could plunge by a third in ten years without a spurt in exploration.
Mexico's domestic industry is also struggling. A shortage of refineries sees Mexico pay billions of dollars to send its crude to U.S. refineries and pipe back costly refined fuel.
Camarillo said a law to enable private partnerships should not require a constitutional change – something the PRD would block and which would need a two-thirds majority in Congress.
A constitutional reform would also be a longer process that may be too ambitious to pass in the Feb. 1 to April 30 session, after which Congress goes into recess until September.
(Editing by Marguerita Choy) |
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