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Mexican Senate Passes Bills to Reform Oil Industry (Update1)
By Jens Erik Gould and Adriana Lopez Caraveo
Oct. 23, 2008 (Bloomberg) — Mexico’s Senate voted to allow state-
owned Petroleos Mexicanos to hire private companies to explore
and drill for oil as protesters and riot police blocked the
streets outside.
Lawmakers passed all seven bills based on an initiative
proposed by President Felipe Calderon. The lower house of
Congress plans to vote on the measures Oct. 28, Emilio Gamboa
Patron, leader for the opposition Institutional Revolutionary
Party in the chamber, said in a statement.
Calderon has said the initiative would free up funds for
exploration to help reverse declining production at the company,
known as Pemex, even as lawmakers amended his plan last week by
removing a proposal to let private companies operate refineries.
“We’re approving the most important energy reform since the
oil expropriation,” said Ruben Camarillo, a member of Calderon’s
National Action Party and the Senate’s energy committee. “This
reform will strengthen Pemex, and give it new and better tools to
face the great challenges it has before it.”
Since Pemex was created with the expropriated assets of U.K.
and U.S. oil companies in 1938, the government has enforced the
clause of the federal constitution that gives the state the
exclusive right to process and distribute oil and natural gas.
Calderon’s measure didn’t propose changing that clause.Protest
Senators approved the bills even as they met at an alternate
site after supporters of former presidential candidate Andres
Manuel Lopez Obrador blocked the entrance to the Senate building
to protest the measures.
Thousands of protesters gathered outside the alternate site
while senators were voting, shutting down Mexico City’s Reforma
avenue in the process.
“I’m here so they don’t privatize Pemex,” said protester
Octavio Velasquez, 50. “The reform is bad for the people.”
Velasquez wore a shirt that read “Defend national sovereignty.”
Opponents led by Lopez Obrador, who narrowly lost the 2006
presidential election to Calderon, say the initiative would
transfer Mexico’s oil wealth to foreigners and the business
elite, and that cutting Pemex taxes is a better option.
Even so, the majority of senators from Lopez Obrador’s Party
of the Democratic Revolution voted in favor of the bills today.
“Lopez Obrador has overplayed his hand,” said George W.
Grayson, Professor of government at the College of William and
Mary in Williamsburg, Virginia. “His goal is chaos.” -
Here is update (see earlier post comments on Bill from Commission under falling oil price)- amazing!
It looks like Mexican Senate actually passed the Exploration Reform bill. Even though a lot of the important privatization driving aspects were removed it is still extremely important step towards unlocking the oil reserves that Mexico needs.
Regards -
AnonymousCalderon better move fast, for his time is short. With an anti-capitalist far left socialist government about to take power in the U.S., you can bet that the same people who put Obama in place will be looking to replace Calderon with Orbrador or some other leftwing lackey. Any reforms of the corrupt and inefficient PEMEX will be reversed by the leftist Government that replaces Calderon. Look also for Steven Harpers center right government to eventually be supplanted by a far left government. Canada just recently held elections to try and stave off this possibility as they saw what was coming in the U.S., but within a couple of years, you can bet they the socialists will be back in power When that happens, look out. The environmentalists will surely try to shut down the oil sands production and will probably succeed.
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