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Monday, 01 December, 2008, 23:50 GMT | more >>

Calderon pushes Pemex reform



By Upstream staff 

Mexico's President Felipe Calderon has sent an energy reform bill to the Senate aimed at allowing private contractors a greater role in helping state monopoly Pemex boost declining production.

Calderon said the bill would not privatise Pemex, saying that it would give the company greater freedom to contract work out to private outfits, manage its own revenues and even issue bonds that only Mexicans could buy.

"We must act now, because time, and oil, is running out on us," the Associated Press quoted Calderon as saying in a nationally televised address.

Oil revenues account for about 40% of Mexico's federal budget.

The bill would also give Pemex more freedom to manage its revenues — the majority of which are transferred directly to the government — and instead reinvest it in production and exploration.

Calderon proposed giving Pemex "greater power to make decision, manage itself and contract work, in order to gain access to state-of-the-art technology".

While he did not specify the new contracting procedures, analysts told AP private companies might get exploration work and be paid a bonus, but not a percentage cut, for any oil they find.

Calderon added: "I want to make clear that oil is and will continue to be exclusively Mexican property. Pemex is not being privatized. Oil is a symbol of the nation's sovereignty."

However, the leftist opposition Democratic Revolution Party claims the proposal involves handing over the oil in the Gulf of Mexico to transnational companies.

Party leader Andres Manuel Lopez Obrador, who has already threatened to order thousands of followers to block highways and airports to protest any proposal that even hints at privatisation, said the plan could cause conflict.

"If they take the oil away from us, there is going to be an atmosphere of farce, of frustration, and we don't want to live amid confrontation, disagreement, and conflict," he said.

The government has said Pemex needs help from outside companies since it lacks the expertise and equipment to explore and drill deep-water reserves, particularly in the Gulf of Mexico, where 50% of its potential reserves lie.

While Mexico has drilled just six wells there in recent years, while activity on the US side of the maritime border has stepped up.


Wednesday, 09 April, 2008, 07:35 GMT  | last updated: Wednesday, 09 April, 2008, 07:35 GMT

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