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 Business News | March 2008 
Mexico to Start Afresh in Oil Reform Talks
 Catherine Bremer - Reuters
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Mexico City - Mexico will start afresh this week with multiparty talks over a planned oil reform, the government said on Sunday, further reducing the chances of a law being passed before Congress winds up at the end of April.
Energy Minister Georgina Kessel said the ruling National Action Party, or PAN, would present a new 22-page diagnosis of the oil industry's problems to opposition lawmakers in the days ahead and hoped it could form the basis of a reform bill.
Weeks of talks by the Senate energy committee have failed to reach a consensus on a reform proposal, amid loud opposition by left-wingers to the idea of private joint ventures in the state-controlled industry. Centrists, whose vote is also needed for a law, have turned more reticent.
The PAN's plan to start a fresh debate appeared to signal that President Felipe Calderon would rather wait to achieve a wide-reaching reform than rush through a watered-down law that does not include private partnerships.
The government had initially hoped to submit a multiparty proposal before the end of March.
"This issue is so relevant and important that we believe it must be carefully analyzed so that together we can solve Pemex's problems," Kessel said, flanked by state oil monopoly Pemex's director general, Jesus Reyes Heroles.
After years of underinvestment during decades of one-party rule until 2000, Pemex's oil output is declining and the company is only discovering one barrel of new oil reserves for every two it extracts.
Pemex says that unless it can hook up with foreign companies to speed up its access to deepwater oil, it will not be able to compensate for a decline at its massive Cantarell oil field fast enough to avoid a serious drop in output.
"Technical studies clearly signal that within 13 years, in other words in 2021, we will have a deficit of 1.8 million barrels per day with respect to current production," Kessel told a news conference.
"Every day that goes by, we miss opportunities," she said.
HEATED BICKERING
Mexico is a top three supplier of crude oil to the United States and crucial because of its political stability, but its oil output has slipped from its 2004 peaks and has been below its target of 3.0 million bpd for the past five months.
"It's urgent we enrich Pemex's portfolio of projects so that within a decade we can restore reserves while still maintaining production," Reyes Heroles said.
He also said barriers to private investment meant Mexico will soon be importing 50 percent of its gasoline, to make up for a shortfall in refining capacity, up from 40 percent today.
Kessel called for an "open, objective and serene" dialogue on energy reform, which has fueled passionate bickering among lawmakers in recent days.
With polls showing half of Mexico opposes lowering barriers to private investment, firebrand leftist Andres Manuel Lopez Obrador, who narrowly lost the 2006 presidential election, has been leading street protests against the PAN's reform plans.
Lopez Obrador has threatened to blockade roads, airports and oil institutions and has warned protests could be violent.
Preliminary seismic tests have indicated Mexico could have 30 billion barrels of oil in deep Gulf of Mexico waters - twice the level of proved reserves at the end of 2007.
Pemex's taxes make up around 40 percent of the Mexican government's fiscal income, and an oil law - Calderon's most ambitious reform attempt to date - would also seek to give Pemex more autonomy and improve its efficiency.
(Editing by Tom Hals) |
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