Industryweek 5801 Oil

Mexico's National Oil Monopoly Expected to End within Days

Dec. 17, 2013
Opening the oil and gas industry to private investment is a highly sensitive issue in Mexico, where many look back with pride at the expulsion of foreign companies in 1938.

MEXICO CITY - Mexico's controversial energy reform breaking a 75-year national oil monopoly will be enacted immediately now that a majority of states have approved it, the president said Monday.

A standing committee in Congress still has to OK the change, designed to lure foreign investment.

But this is expected in a matter of days "and once it happens I will promulgate the reform immediately," President Enrique Pena Nieto said during a visit to Turkey, according to a statement from his office.

Congress passed the reform last Thursday, and after that it needed the green light from the legislatures of a majority of Mexico's 31 states because it involved a constitutional amendment. Sixteen have done so since Friday.

Opening the oil and gas industry to private investment is a highly sensitive issue in Mexico, where many look back with pride at the expulsion of foreign companies in 1938.

Leftists Opposition Contests the Change

The Mexican leftist opposition strongly opposes the change, saying it amounts to a privatization of the industry and a gift to U.S. companies.

But backers of the reform say aging refineries, lack of deep-water drilling technology and dwindling oil production made the legislation an urgent necessity to save the state-run industry

No major obstacles were expected at the state level. The ruling PRI party and the conservative PAN party control most of Mexico's state legislatures.

But even in some states where the change passed, there were demonstrations.

One of the most boisterous was in the western state of Jalisco, where some 300 people tried to prevent lawmakers from entering the chamber.

Protesters set a fire at the entrance and sprayed paint on cars belonging to lawmakers. Riot police responded with tear gas.

Opposition parties want a referendum on the energy reform.

The change is the sixth major one enacted by Pena Nieto, who took power last year. Others have involved education, telecoms, the financial sector, taxes and the political system.

Copyright Agence France-Presse, 2013

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