This week, the Mexican parliament will debate an energy reform bill that aims to change the way that PEMEX, the state-owned oil monopoly, operates.

Right of centre president Felipe Calderón introduced the bill which aims

1. to allow PEMEX greater managerial and financial autonomy
2. to provide a role for the private sector in the construction and operation of refineries as well as transportation
3. to allow PEMEX to work with the private sector in the development of oil fields in deep waters, where Pemex has neither the money nor the expertise to explore but where it believes most of the country’s reserves lie.

The long-term goals are to increase a declining production and to ensure sustainability.

Mr Calderón pointed out that Pemex now produces 300,000 fewer barrels per day (bpd) than it did three years ago. The lost value, he said, was equivalent to almost $10bn, more than three times the budget of Oportunidades, the government’s extreme-poverty alleviation programme.

At the same time, proven reserves have plummeted 27 per cent since 2002, and now stand at just 9.2 years’ worth of production at current rates. Given the time involved in oil exploration, that is alarmingly low for a country with such potential, experts say.

The opposition are crying foul and saying that Calderón wants to privatise PEMEX, a delicate topic given its hallowed nature in the Mexican national weltanschaung.

Source: FT

One also hopes that it will do something to curb the corrupt practices rife in sectors of the industry. I have been involved in three major cases involving Mexican oil and to say that some actions and decisions have been “questionable” would be charitable in the extreme.

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