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Mexico: Reforming Pemex Continues to be Big Issue
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Friday, 04 July 2008 |
Pemex remains a major political issue and is currently under the
spotlight with the proposed reform bill that would allow international
investment but affect the people who benefit from the high levels of
corruption.
It's the proposed opening-up of the state-owned oil company, Petróleos
Mexicanos (Pemex), to foreign investors. This controversial, proposed
reform, which Calderón's government says is absolutely necessary, "aims
to open up Pemex to greater private investment by offering contracts at
all levels of crude production in the world's sixth-largest oil
producer."
Calderón, the leader of Mexico's conservative, National Action Party,
has argued "that greater private investment is needed to boost Mexico's
reserves and to expand refining capacity, in order to cut the country's
dependence on imported fuel. But opponents of the bill say it amounts
to privatization of Mexico's oil assets, which were nationalized
amidst fierce U.S. and British opposition in 1938."
Mexico is the third most important supplier of crude oil to the United
States. However, production by Pemex, which is tightly controlled by
the government, has fallen more than 10 percent since reaching a peak
in 2004.
Pemex has failed to invest enough in exploration or refining, and [its]
pipelines and storage facilities have deteriorated. Mexico now imports
40 percent of its refined fuel.
If the Calderón-backed Pemex reform bill is passed by Mexico's
congress, it "would allow private companies to build and operate
refineries, pipelines and storage facilities. But they would not be
permitted to invest in exploration or production, even in joint
ventures."
Furthermore, "privately owned refineries would still have to buy
their crude oil from Pemex and sell fuel back to the company at
controlled prices." Supposedly, the reform in the way Pemex does
business would allow the company to retain more of its profits when the
price of oil on the world market is high; in theory, too, it would make
its operations more transparent.
Local news El Financiero reports that it is likely that Mexico's
congress will debate and vote on the Pemex reform bill in August.
Meanwhile, in the media, in the streets, in cafés and among ordinary
Mexicans of all stripes, the future of Pemex and the ability of the
country to meet its energy needs are hot discussion topics that aren't
going to go away anytime soon.
PetorlWorld 030708
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