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Mexico's President Enrique Pena Nieto proposed sweeping reforms of the country's oil sector Monday that would allow foreign energy firms back in 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 reform would allow Pemex, which has seen a sharp drop in production in recent years, to enter into joint ventures with foreign private investors.
But it would maintain the state's ownership of all hydrocarbon resources and Pemex itself, a key source of government revenues, 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 percent owned by the nation," Pena Nieto stressed.
The reforms aim at restructuring the tax regime that has hurt Pemex's competitiveness.
The company was established in 1938 when Mexico nationalized the oil industry, and is responsible today for about one-third of state income.
Pena Nieto said the government will take a long-term position on getting income from the oil sector rather than a short-term approach collecting taxes.
If the reforms are approved, he predicted that oil production could grow from 2.5 million barrels a day last year to 3.0 million bd in 2018 and 3.5 million by 2025.
The president could face significant political opposition to the changes, however. The three leading political parties have agreed that Pemex needs to be reformed to encourage more investment and production in the sector.
But the left opposes any constitutional amendments and has planned protests over the coming weeks against what they consider the privatization of publicly owned resources.