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Mexican president signs law opening oil industry

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(Globalpost/GlobalPost)

Mexico's President Enrique Pena Nieto on Friday signed a controversial law opening the country's oil industry to foreign investment for the first time since it was nationalized in 1938.

Pena Nieto signed the law at a ceremony in the National Palace after it passed Congress and a majority of Mexican states voted to ratify it.

"I recognize the senators and federal deputies as well as the members of the local legislatures in saying yes to a historic reform, one that is fundamental to the future of Mexicans," he said.

The reforms are aimed at attracting foreign investment with profit- and production-sharing contracts that would break the 75-year-old oil monopoly held by state oil company Pemex.

Oil output has dropped from 3.4 million barrels per day in 2004 to 2.5 million today, and Mexico imports half of the gasoline it consumes.

The government hopes to use foreign and national investment to reverse that trend, increasing production, expanding refining capacity and drilling for shale gas and deep-water oil deposits.

The reforms encountered few obstacles in the Congress and state legislature because it had the support of the ruling Institutional Revolutionary Party (PRI) and the conservative National Action Party (PAN).

But they sparked protests on the left, led by the Democratic Revolution Party (PRD), which called the legislation a national betrayal.

Many in Mexico look back with pride at the expulsions of foreign companies by president Lazaro Cardenas in 1938.

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http://www.globalpost.com/dispatch/news/afp/131220/mexican-president-signs-law-opening-oil-industry-0