11 December 2013 23:20 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--Mexico’s Senate signed off on a historic energy reform bill on Wednesday that aims to open up the country’s state-controlled hydrocarbons sector to foreign investment for the first time in 75 years.
Senators approved the bill, put forward over the weekend by the ruling Institutional Revolutionary Party (PRI) and the opposition National Action Party (PAN), by 95 votes to 28, according to a statement on the Senate’s homepage.
The bill has been sent to the lower house of Congress to be voted on, the Senate statement said, and would require a simple majority to be approved. It would then have to be ratified by 17 of the country’s 32 state legislatures.
The bill, an amended version of President Enrique Pena Nieto’s draft proposals announced in August, requires controversial changes to the country’s constitution to give private firms the opportunity to explore and extract the nation’s hydrocarbon resources and form profit-sharing partnerships with state energy company Pemex.
Following the Senate vote, Pena Nieto said that the reform would “permit the energy sector to boost industrial and regional development for the benefit of all Mexicans”.
The proposals approved on Wednesday would also see the creation of a “Fondo Mexicano del Petroleo”, a sovereign wealth fund to manage oil and gas revenues, as well as a number of regulatory bodies including an environmental protection agency.
According to PRI senator Rene Juarez Cisneros, reform is essential in the current international environment, insisting that Mexico must have a “modern regulatory framework that allows it to become more competitive in the energy sector”.
However, the leftist Democratic Revolution Party (PRD), Mexico’s third largest political party, opposed the reform and has branded changes to the country’s constitution as “treason”.
“We will use all legal and parliamentary resources to stop the sell off of the energy sector,” said PRD deputy Carlos Reyes Gamiz.
Reform has also struck a nerve with large swathes of the Mexican population, who see Pemex as embodying the ideal of national independence from foreign intervention. Mexican media reported that protests are continuing outside the Senate building in Mexico City.
In efforts to reassure a sceptical public, Pena Nieto reiterated that the nation’s oil resources would remain in state hands should congress and state legislatures approve the proposals.
“Pemex, the CFE [Mexico’s state electricity commission], our energy resources and oil revenues will remain the property of all Mexicans,” he said.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections