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Wednesday, 19 November, 2008, 23:40 GMT | more >>

Mexican oil reform back to drawing board



By Upstream staff 

Mexico will start over this week with multi-party talks over planned oil sector reform, the government said, 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, Reuters reported.

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 multi-party proposal before the end of March.

"This issue is so relevant and important that we believe it must be carefully analysed 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 deep-water oil, it will not be able to compensate for a decline at its massive Cantarell oilfield 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.

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% 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.


Monday, 31 March, 2008, 02:24 GMT  | last updated: Wednesday, 02 April, 2008, 18:22 GMT

Rethink: Mexican Energy Minister Georgina Kessel
 

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