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Mexico City braced for oil sector protest



By Upstream staff 

Photo by Reuters


Mexican leftists are set to launch protests in the country’s capital this weekend, seeking to block any attempt to allow private capital to invest in the country’s oil sector.

Similar protests paralysed Mexico City in the wake of the general election in 2006.

A Reuters report quoted Mexican Senator Graco Ramirez as saying today that the left-wing Party of the Democratic Revolution is willing to hold talks in Congress about energy reforms sought by President Felipe Calderon. The offer is seen as an attempt to head off confrontation.

Hundreds of thousands of people marched in 2006 to support losing presidential candidate Andres Manuel Lopez Obrador's claims that Calderon stole the election by fraud.

Now Lopez Obrador hopes to rally his supporters outside the headquarters of state oil monopoly Pemex on Sunday to protest at what he sees as plans to privatise the company.

Ramirez, the left's main voice on energy in the upper house, said the legislature was still the best place to hammer out the future of Mexico's energy sector, which is grappling with declining output and reserves.

"We are up for the debate," said Ramirez, secretary of the Senate energy committee which wants to agree a reform proposal backed by the three main political parties by April.

He said his party would not boycott Congress energy debates to disrupt the reform, as sought by firebrand Lopez Obrador.

"We are not going on any parliamentary strike," he told Reuters in an interview.

"But we are going to act with a lot of firmness as a movement outside," Ramirez said, referring to street protests.

The energy law, which Calderon wants to pass before Congress goes into recess on 30 April, could give Pemex more autonomy, improve transparency and allow private investment in refining and fuel transport.

Calderon's party also would like to permit joint ventures in deep-water exploration in offshore fields that straddle the US maritime border - an idea the left firmly opposes.

Pemex says easing a ban on profit-sharing private partnerships could help shore up flagging output and reserves.

But the left claims all Pemex needs is more investment and better management.

"We can show it's feasible and possible for Pemex to be viable without privatising it," Ramirez told Reuters.

Ramirez, whose party has never been in power, said past governments intentionally mismanaged Pemex to justify a future reversal of Mexico's 1938 oil sector expropriation.

"Everything they have done has been done deliberately ... to justify privatisation and selling Pemex like scrap iron," he said.

A newspaper poll this week showed half of Mexicans oppose allowing foreign investment in oil and natural gas.

As long as it does not seek a change to the constitution, which gives Pemex the sole right to extract Mexican oil, the ruling National Action Party could achieve its planned reforms with the sole support of the other main opposition, the Institutional Revolutionary Party.

Experts are divided over whether strategic alliance contracts could be drawn up without violating Mexico's constitution.


Friday, 22 February, 2008, 02:35 GMT  | last updated: Friday, 22 February, 2008, 08:00 GMT

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