Mexican Senate committees debate revamped energy reform

Sun Dec 8, 2013 2:37pm EST
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By Alexandra Alper and David Alire Garcia

MEXICO CITY (Reuters) - Mexican Senate committees on Sunday debated an energy bill that would open up the world's 10th-biggest oil producer to private investment by allowing new types of contracts, marking the industry's most dramatic overhaul in 75 years.

The bill, announced by centrist ruling party and opposition conservative lawmakers on Saturday, would let private firms partner with ailing state oil firm Pemex PEMX.UL via profit-sharing, risk-sharing and service contracts as well as licenses in a bid to boost sagging production.

The reform, which would keep ownership of crude in state hands, is at the center of an economic reform drive that President Enrique Pena Nieto hopes will boost lagging growth in Latin America's No. 2 economy.

It is much bolder than a draft proposed by Pena Nieto's Institutional Revolutionary Party (PRI) in August, which would have offered profit-sharing contracts and was considered too tame for attracting private firms.

Members of the leftist Party of the Democratic Revolution (PRD) called the bill "national treason" while centrist ruling Institutional Revolutionary Party (PRI) lawmakers and conservative opposition figures sang its praises.

"Today we have bet that we can imagine a Pemex that can go out and compete in the world," said PRI Senator David Penchyna, who heads the energy committee.

Saturday's proposal would allow private investors to drill for and market the country's oil.

"I feel very optimistic about this," said Luis Miguel Labardini, a partner at Mexico City-based energy consultancy Marcos y Asociados, who said that the production-sharing contracts are "very important" for Mexico's vast deepwater oil reserves.   Continued...

Mexico's President Enrique Pena Nieto addresses the audience during The Economist's Mexico Summit 2013 in Mexico City November 7, 2013. REUTERS/Tomas Bravo