UPDATE 1-Mexico ruling party sees oil reform delayed

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MEXICO CITY, April 14 (Reuters) - Protests in Mexico's Congress will likely delay approval of a government energy reform plan to boost private investment in the struggling oil industry, a senior ruling party lawmaker said on Monday.

President Felipe Calderon's conservative party is seen able to win the 50 percent majority it needs to pass an oil bill after leaders of a centrist opposition party said last week they liked the general look of the proposal.

But left-wing protests against the plan have paralyzed Congress and the centrist Institutional Revolutionary Party, or PRI, has said it is not in a hurry to approve the bill before the spring session of Congress wraps up on April 30.

"It's clear we can't do it during this period of sessions," National Action Party Sen. Santiago Creel, who leads the governing PAN in the upper house, told Mexican radio.

Mexico is the world's No. 5 producer of crude and a top U.S. supplier but state-run oil company Pemex is not finding new reserves fast enough to stave off a decline in output.

The left-wing Party of the Democratic Revolution, or PRD, says planned changes to allow state oil monopoly Pemex to offer performance-based incentive fees in service contracts would amount to a creeping privatization.

The party's militant former presidential candidate, Andres Manuel Lopez Obrador, is leading rallies against Calderon's proposal while protesting PRD lawmakers have camped out on the floors of both houses of Congress since last Thursday.

"If we agree with the other parliamentary group on a wide, open debate ... we are prepared to suspend our actions in both chambers," said the PRD's Senate coordinator Carlos Navarrete.