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(Apr 02, 2008) President Felipe Calderón submitted an energy reform bill to the Mexican Congress on April 9, 2008. In a broadcast address to the nation, he pointed out that the object of the reform is to make the best possible use of the potential of the country's oil industry and to strengthen Petróleos Mexicanos (PEMEX). Recalling that 70 years ago Mexico nationalized the oil industry, he reiterated that petroleum will continue to belong exclusively to Mexicans and that PEMEX will not be privatized. He added that today, however, Mexicans should act "with true patriotism" and to make the best of the country's natural resources for the benefit of all Mexicans. Calderón stated that currently Mexico is losing ground in competition in the international energy market. PEMEX, after being one of the most important oil companies in the world, has dropped now to eleventh place. He explained that the causes are not only financial, but fundamentally technological and operational, and as a consequence of this, the oil reserves of the country are diminishing. He noted that even though Mexico is an oil rich country, four out of every 10 liters of the gasoline that are consumed in the country are imported, because PEMEX does not have the necessary capacity to refine petroleum. He added that although Mexico has important inland seams and also some very near the coasts, overall it is estimated that more than half of Mexico's potential oil reserves are in the deep waters of the Gulf of Mexico and that Mexico should take advantage of that wealth.
After observing that the bill does not seek to amend the Constitution, Calderón outlined the bill's seven principal points, as follows:
• to provide PEMEX the financial and managerial autonomy it needs to better face new challenges. In particular, the bill seeks to give PEMEX major freedom in managing its budget and its debt so that it could re-invest its profits in the improvement of the company. This would permit the company to spend major resources in new oil and gas exploration and production projects.
• to establish a new administrative structure for PEMEX and to provide the company with major powers of decision-making, administration, and hiring, so that it would have access to the latest technology and better capacity for implementing projects. In particular, the bill proposes establishing a special system for hiring, acquisitions, and public works that is different from the rest of the government and that is deemed likely to enable the company to be much more efficient.
• to allow PEMEX to hire specialized firms in the construction and operation of new refineries, so that in future Mexico will not have to import gasoline, diesel, and other oil products. The purpose of this measure is not only to completely eliminate oil importation and strengthen the national petrochemical industry, but also to create more jobs; generate regional development in the areas where refineries will be built; and produce cleaner, environmentally friendly gasoline.
• to improve the corporate governance of PEMEX in order to bring it to the level of the best companies of the world and to guarantee the company's accountability and absolute transparency.
• in order to consolidate PEMEX as a company owned by all Mexicans, to create citizens' bonds; that is, broadly distributed credit instruments that would be available to all Mexicans. For the first time, Mexicans would not only be owners of the oil but would also directly benefit from part of the profits of the company. Each citizen's bond would have a 100-peso value. At the same time, the bill proposes strict limits to prevent the bonds from being concentrated in the hands of a few.
• to strengthen guarantees on the part of the relevant authorities that all Mexicans will partake in the benefits derived from the oil sector.
• to guarantee, via a series of measures, that at the same time more oil is produced and the reserves are replaced for future generations, PEMEX's commitment to the care of the environment is maintained.
(Mensaje Íntegro del Presidente Calderón, EL UNIVERSAL, Apr. 9, 2008, available at http://www.eluniversal.com.mx/notas/496876.html.)
|Author:||Norma Gutierrez More by this author|
|Topic:||Energy More on this topic|
|Jurisdiction:||Mexico More about this jurisdiction|
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Last updated: 04/02/2008