CG/LA Infrastructure's InfraBlog
By Eric Martin, Carlos Manuel Rodriguez & Helder Marinho – Jun 17, 2013 2:58 PM ET
Mexican President Enrique Pena Nieto said he’s negotiating support to break the state monopoly over oil and gas exploration and production this year to accelerate economic growth.
In the model envisioned by Pena Nieto, state-owned Petroleos Mexicanos would develop certain fields, with others being tapped by foreign and private companies. He declined to discuss details of the proposal, or whether it would require a change in the constitution.
Seven decades after his party seized fields from the predecessors to Exxon Mobil Corp. and Royal Dutch Shell Plc (RDSA), Pena Nieto is preparing for the return of international oil companies to arrest eight years of decline in crude output. An opening would probably be broad, from offshore drilling to shale fields similar to those that have revived the U.S. petroleum industry, Pena Nieto said.
“It’s obvious that Pemex doesn’t have the financial capacity to be in every single front of energy generation,” the 46-year-old president said in an interview in London today, before traveling to Northern Ireland for meetings with Group of Eight leaders. “Shale is one of the areas where there’s room for private companies, but not the only one.”
Pena Nieto said his administration will send the energy bill to congress by September, when regular sessions resume, followed by a tax proposal. He said he’s confident the so-called Pact for Mexico of the country’s top three political parties will ensure the bill is approved by Congress by year end.
“We’re approaching key deadlines,” Pena Nieto said. “I’m optimistic that this political climate of understanding and agreement will be maintained.”
Opening oil and gas exploration for private investment will help Mexico revive oil production that is heading for its ninth year of decline. Crude output averaged 2.52 million barrels a day this month through June 9, compared with 3.38 million barrels a day in 2004.
Pena Nieto said there’s political momentum to pass more reforms after the approval of sweeping education and telecommunications laws and the creation of the Pact for Mexico. His Institutional Revolutionary Party dropped opposition to an oil-law overhaul in March.