Oil Report

Mexico's Calderon rejects "blackmail" in oil debate

MEXICO CITY, April 18 (Reuters) - Mexican President Felipe Calderon brushed aside on Friday noisy leftist opposition to his oil sector reform plan, saying he would not give into blackmail.

Left-wing lawmakers have blocked Congress in Mexico City for the past week in a show of resistance to Calderon’s sector overhaul, which would increase private sector investment in state oil monopoly Pemex via contracts with bonus fees.

“Neither threats, nor provocations will stop the government of Mexico; blackmail won’t stop Mexico either,” Calderon said in a speech. “Our intention is to hold peaceful, sensitive dialogue within a framework of reason and the law to do what is best for Mexico,” he added.

Pemex says it needs the reform to attract partners to help it reach crucial deepwater oil deposits.

But leftists say using bonus fees to procure alliances in exploration violates barriers in the Constitution to private firms drilling for Mexican oil.

Pemex argues that without private partners it could take the company more than 60 years to get to a stage where it has the 300 deep-sea oil production wells it needs in place. (Reporting by Robin Emmott; Editing by Ben Tan)