| MEXICO CITY, June 25
MEXICO CITY, June 25 Mexico's main leftist
opposition party on Tuesday presented a set of proposals to make
state oil giant Pemex independent, providing a foretaste of
talks likely to surround government efforts to make the company
President Enrique Pena Nieto's pledge to allow more private
capital into Pemex, a symbol of Mexican
self-sufficiency, is one of the most contentious issues on his
legislative agenda, even though he has yet to reveal many
details of his plan.
Pena Nieto hopes to pass a reform with the other main groups
in Congress, including the leftist Party of the Democratic
Revolution (PRD), which is resisting the president's aim to make
changes to the constitution to open up the industry.
Presenting their reform model in Mexico City, PRD leaders
said they saw no need to alter the constitution to revamp Pemex,
whose income makes up about a third of the federal budget.
Still, PRD Chairman Jesus Zambrano said he was ready to
listen to the government's ideas, urging Pena Nieto to spell out
his plans for the oil company, whose output has slipped from 3.4
million barrels per day in 2004 to just over 2.5 million now.
"We have our proposal, now we want to know theirs ... There
must be a public debate," Zambrano said.
The PRD argues that corruption, inefficiency, a heavy tax
burden and the fact the company is under the control of the
finance ministry are holding back the 75-year-old Pemex.
To end this, the PRD plan envisions cutting Pemex loose to
run its own operations, and bringing down its tax burden.
Senior PRI lawmakers are keen to keep the PRD on board for a
reform of the oil monopoly to try and reduce the impact of
protests likely to accompany the launch of the government plan.
Core elements of the PRD plan, such as giving Pemex more
independence and reducing the company's tax burden, are likely
to form part of the government's own vision.
The government aims to shift some of that burden onto the
public with a tax system overhaul in tandem with Pemex reform.
Some PRD officials say the party may also be willing to
contemplate small tweaks to the constitution provided Mexico
retains control and ownership of its oil reserves.
Advocates of constitutional change say that without it,
Mexico will fail to attract the kind of investment the industry
needs, and risks falling further behind countries like the
United States that have ramped up output in recent years.
Pena Nieto's ruling Institutional Revolutionary Party (PRI)
fell short of a majority in Congress when he won office last
year and the president sought to strengthen his hand by forging
a loose alliance with Zambrano and conservative leader Gustavo
Madero to work together on economic reforms.
Oil majors are hoping Pena Nieto will deliver a far-reaching
shake-up to Pemex that will open the door to them participating
in lucrative exploration and production work in Mexico.
They have held out hope his plan could allow them to book
crude reserves that can be used as collateral - but even the
strongest PRI proponents of a business-friendly reform say such
a measure is almost certain to be blocked by Congress.
Instead, government officials and senior politicians say the
reform is likely to set out a framework that could allow oil
majors to enter profit-sharing agreements with Pemex in exchange
for the companies shouldering production and exploration risks.
Ever since the PRI created Pemex when it nationalized the
oil industry in 1938, Mexico has been highly protective of its
oil wealth, keeping foreign investors out of the most
strategically important parts of the business.
From the moment he took office in December, Pena Nieto has
had to deny accusations he plans to privatize the company,
repeatedly forcing him on the defensive over a reform his
government plans to present by September at the latest.
Leading leftist politicians, such as Andres Manuel Lopez
Obrador, the runner-up in the last two Mexican presidential
elections, have pledged to oppose the reform vigorously.
Street protests are likely to be launched against the
liberalization of Pemex in the coming weeks.