Bloomberg,the Wall Street Journal and the Los Angeles Times have reported that President Enrique Peña Nieto has already made significant strides in his efforts to open up Mexico’s oil industry (PEMEX) to private investment. As a member of the nation’s ruling Partido Revolucionario Institucional (PRI),the new president won a major victory when the party voted to change its bylaws,clearing the way for major reform of the enormous national oil company at its annual convention earlier this week.
“Peña Nieto,46,has pledged to open the oil industry to more competition and to reduce the tax burden on PEMEX in a bid to boost economic expansion,” writes Bloomberg. “The move could increase gross domestic product (GDP) by as much as two percentage points a year,according to the Energy Ministry.”
Mexico is currently the world’s ninth-largest producer of crude oil,but this ranking could move up significantly in the coming years following the proposed reforms. The PRI bylaws had previously forbidden its members who serve in Congress from voting on any change in the way PEMEX is managed,but Peña Nieto has pledged to make possible a serious of progressive reforms that will allow the oil company to seek private and foreign investment to fund new deep-sea exploration and other projects.
“Mexico’s state oil monopoly plans to invest a record $25.3 billion this year,” writes the Wall Street Journal. “PEMEX had record sales of $126.6 billion in 2012,up from $111.4 billion in 2011.”
The new administration plans to overhaul Mexico’s existing energy laws,which are very restrictive,so they will allow for greater private investment in the state-run oil industry. Proposals to Congress are expected to be ready by the second half of 2013 and reform discussions are already under way.
“Let’s show,with attitude,with action and with voice,that we are a new generation of PRI,” Peña Nieto said at the annual convention. “This is an assembly of renewal and transformation.”