Mexico Leader Said to Seek Changes to Break Oil Monopoly

[Judi Lynn]

Source: Bloomberg News

Mexico Leader Said to Seek Changes to Break Oil Monopoly
By Eric Martin & Nacha Cattan - Aug 5, 2013 10:06 PM CT

Mexican President Enrique Pena Nieto will seek to amend three articles of the constitution to break Petroleos Mexicanos’s monopoly in the state-run oil industry, according to two people with direct knowledge of the bill.

Pena Nieto will propose production-sharing contracts for oil exploration and output, according to the people, who asked not to be named because the bill will be officially presented by tomorrow. The proposal will seek to change articles 25, 27 and 28 of the constitution, and tenders for the most part would be managed by government regulators, the people said yesterday.

The overhaul would be the biggest change for the industry since 1938, when then-President Lazaro Cardenas seized oil fields from British and U.S. companies and changed Mexico’s charter to assert control over its energy resources. Pena Nieto’s proposal also would break the electricity distribution monopoly held by state power company Comision Federal de Electricidad, or CFE, according to one of the people.

“When you talk about changing the constitution, the historical magnitude of that phrase is going to make a lot of people in a lot of places pay more attention,” Jeremy Martin, an oil specialist at the Institute of the Americas in La Jolla, California, said yesterday. “This is the big ticket. This is very close to the whole enchilada.”

Read more: http://www.bloomberg.com/news/2013-08-06/pena-nieto-said-to-seek-amendment-to-share-mexico-oil-production.html

[DonCoquixote]

1. Oh boy

If i read this right, that means that big Oil will be there like flies to a corpse.

[Sunlei]

2. be a big mistake for Mexicans to let go of their oil & sell out to private oil companies.

wish the usa had an oil company owned by 'the people'

[AngryAmish]

3. THis is going nowhere

Pemex may be grossly inefficient but it the largest source of patronage and graft in Mexico. Their ruling class needs it desperately.

[Javaman]

4. last time this was tried there were riots in Mexico City...

I wonder how much this tool is being paid by the oil corps?

[Kingofalldems]

5. Nice

[Judi Lynn]

6. Mexico proposes opening oil sector to foreign firms

Mexico proposes opening oil sector to foreign firms
August 14, 2013
AFP

MEXICO CITY - President Enrique Pena Nieto proposed sweeping reforms of oil sector that would allow foreign energy firms back into the industry 75 years after being thrown out. Pena Nieto proposed a constitutional reform that would allow state oil monopoly Pemex to partner with private energy companies in oil and gas exploration and production. The joint deals aim at tapping foreign oil company capital and technology to revive oil and gas production, which has sagged under Pemex in recent years.

But the giant Pemex—Petroleos Mexicanos, which has dominated the industry since the 1938 nationalization—would maintain the state’s ownership of all hydrocarbon resources.
And Pemex itself, a key source of government revenues and a crucial driver of the economy, would remain in state hands.

The reform would modify Article 27 of Mexico’s constitution to allow private companies to form joint ventures with Pemex in energy exploration and production, according to a summary of the proposal.
Article 28 would be changed to allow Pemex to join with private firms in refining, petrochemicals and storage.

Still, Pena Nieto stressed, “oil and other hydrocarbons will continue to be the exclusive assets of the nation,” and Pemex will remain “100 per cent owned by the nation.”
The reforms aim at restructuring the tax regime that has hurt Pemex’s competitiveness.
The company was established in 1938 when Mexico took over foreign oil company operations, and is responsible today for about one-third of state income.

More:
http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/14-Aug-2013/mexico-proposes-opening-oil-sector-to-foreign-firms