Mexico's leftist opposition rallies against energy reforms

MEXICO CITY, March 17 Mon Mar 18, 2013 2:04am GMT

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MEXICO CITY, March 17 (Reuters) - Waving party flags and shouting their support, tens of thousands of leftist party members rallied on Sunday against government plans to overhaul Mexico's energy sector, a preview of the tough road ahead for President Enrique Pena Nieto's reform push.

Organized by the leftist Party of the Democratic Revolution, or PRD, the rally took place on the eve of the 75th anniversary of the nationalization of the country's oil industry, the historical pivot that gave birth to state oil monopoly Pemex.

Speakers denounced any move to privatize the government-run oil giant, even though Pena Nieto and other members of his centrist Institutional Revolutionary Party, or PRI, have consistently denied any plans to sell or privatize Pemex.

"We are being loyal to this historical legacy that has given our oil riches to the nation and we are going to defend it with everything we've got," said Jesus Zambrano, the PRD's national president, to rousing applause.

He later told reporters that its "absolutely false" that Mexico's constitution must be amended to lure significant private investment into the country's flagging oil sector.

Analysts say decades of mismanagement and a heavy tax burden have hobbled Pemex while its oil output has fallen by over a quarter since reaching a peak of 3.4 million barrels per day in 2004.

If major reforms are not undertaken, the government warns one of the top oil suppliers to the United States could itself be importing crude as soon as 2018.

Pena Nieto commemorated the anniversary of the 1938 expropriation in a Sunday speech at a Pemex refinery in the city of Salamanca, in Mexico's central Guanajuato state.

Without going into specifics, Pena Nieto emphasized the need for major changes in the sector.

"The transformation of Pemex is indispensable to free up Mexico's great economic potential," he said.

Cuauhtemoc Cardenas, a past PRD presidential candidate and the son of former President Lazaro Cardenas who ordered the 1938 nationalization, also struck a nationalistic chord.

"We have a framework for the (energy) industry that will serve the country, and above all, that will strengthen our national sovereignty," he said without going into details.

Mexico's constitution says all hydrocarbons are owned by the state and only the state can exploit the country's energy wealth, limiting the level of involvement by private companies to essentially service contractors for Pemex.

PRD officials said the rally attracted more than 60,000 people from all across the country.

"We're defending what is ours," said retiree Hector Pedroza, 69, from the nearby state of Mexico, shortly after the rally ended.

Pedroza said he'd like to see a growing domestic oil industry, but he's skeptical that ordinary Mexicans will benefit from potential reform.

"Reform would be a good thing, but not one that treats Mexico like a slave. Foreign companies that come here to invest pay us so little," he added.

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