Mexico Moves Towards Ending 75-Year State Monopoly In Oil

December 11, 2013Mexicoby EW News Desk Team

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Mexican politicians have submitted a draft bill to the Senate that could potentially allow foreign firms to drill for oil in the country for the first time in 75 years, according to AFP on Tuesday.

The bill, backed by the ruling Institutional Revolutionary Party (PRI) and the opposition conservative National Action Party (PAN), is part of President Enrique Pena Nieto's economic reform drive, seeking to reverse a downward trend in oil production, which has dropped from 3.4 million barrels per day in 2004 to 2.5 million bpd today.

Although analysts see potentially large benefits, there has been strong opposition from the public and nationalist groups who see the bill as selling out on national sovereignty.

The reform is "a 180-degree turn from what Mexicans learned about the concepts of sovereignty and nationalism," said Zoe Robledo, from the left-wing Democratic Revolution Party (PRD), who has equated the plan to “treason”.

Protestors also gathered outside the Senate after the announcement, hitting metal police barriers with shoes, sticks and rocks.

Mexico’s present oil production is controlled exclusively by Petroleos Mexicanos (Pemex), whose independence from outside influence has been a source of national pride for decades.

In 1938, then president Lazaro Cardenas had nationalised the foreign-operated oil industry, creating Pemex to assert Mexico's right to its own mineral wealth.

The PRI and PAN say that the reform is badly needed to modernise Pemex.

"History judges events and it will have to judge this reform as a turning point for the national economy," said PRI Senator Oscar Roman Rosas Gonzalez.

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The PAN also appeared to have won its battle to remove Pemex's powerful union from the company board as the latest text of the legislation shows that it would lose its five seats.

Polls have shown a wide range of opinion on the issue. A survey published in June by the Mexico City-based CIDE university showed the 65 percent of Mexicans opposed foreign investment in the oil industry, accorded to Reuters.

But, another poll by the newspaper Excelsior in August showed 63 percent backed Pena Nieto's plans to change the constitution to allow more private investment in the energy industry.

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