Mexico has moved on from its 75 years of state-owned energy. The Mexican Senate Wednesday passed a bill that will open Petróleos Mexicanos, commonly known as Pemex, to foreign investment.
The ruling party, the Partido Revolucionario Institucional (Institutional Revolutionary Party, or PRI) and its right-wing ally, the Partido Acción Nacional (National Action Party, or PAN) secured 95 votes for the measure, with 28 against, in a controversy that occupied the country since August.
The debate, which dates back more than 20 years, had its moments of tension, due to the fierce opposition of left-wing parties, such as Partido de la Revolución Democrática (Party of the Democratic Revolution, or PRD) and Partido del Trabajo (Workers’ Party, or PT). Opponents of the proposal said this was “treason against the country,” since the decision ends 75 years of energy independence: Pemex was expropriated in 1938 by then President Lázaro Cárdenas, and it has been seen as a symbol of Mexican pride ever since.
The reform will modify three articles in the constitution - something the left made clear since the proposal's inception that it would not support. The articles will be modified so foreign private companies can partner with Pemex in extracting and refining oil, but production will remain under Mexican ownership.
Even so, left-wing senators say the above is a ruse/trick. “Contracting licenses and partnerships are the same as a takeover. We are giving the ownership of the oil away,” said Senator Luis Sánchez Jiménez. The government, however, assures that is not going to happen – partnerships will be made for exploration and development exclusively, and partner companies will be paid for their work.
The defenders of the bill argued that production of oil has decreased enormously. “The state of Texas alone produces more than the whole of Mexico,” said Humberto Mayans, senator for PRI. Oil production in Mexico has dropped from 3.4 million barrels per day (bpd) in 2004 to 2.5 million barrels per day as of June 2013.
The bill gives Pemex two years to become “State productive companies,” a vague term that means that they need to become more competitive and internationally minded, in order to attract investors.
Patricia covers Latin America for the International Business Times.
Before joining IBT in March 2013, she worked at BBC America in New York, La República in Lima...