Mexico's Calderon closer to energy reform deal

By Jason Lange

MEXICO CITY, Aug 5 (Reuters) - President Felipe Calderon is closing in on an energy reform that could give a shot in the arm to Mexico's struggling oil industry, but it is not clear if oil majors will be lured into crucial deep-water projects.

It is Calderon's most ambitious economic reform attempt yet but the left-wing opposition and many ordinary Mexicans are wary of private involvement in the cherished oil sector, which has been in state hands since 1938.

Calderon, a conservative, lacks a majority in Congress but a centrist opposition party expects to reach a deal with the government in the coming weeks to approve a reform.

Sen. Francisco Labastida, a central figure in talks between the government and his centrist Institutional Revolutionary Party, or PRI, said a compromise bill was "probable".

"We should be finishing it by the end of August or the beginning of September," he told Reuters.

Calderon wants to protect Mexico's status as a top supplier of the United States and reverse a big drop in output in the world's No. 6 producer. Mexico's main oil field, Cantarell, has begun to dry up after three decades in use.

State oil monopoly Pemex lacks the technology to successfully drill for oil in deep waters of the Gulf of Mexico and current legislation makes it very difficult for it to enlist the help of private companies.

A proposal by Calderon, launched in April, would let Pemex sign performance-based contracts with foreign companies to get them more involved in project planning and give them incentives to share technology.