Mexico’s Congress approves landmark energy reform bill

13 December 2013 00:00  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Mexico’s Congress approved on Thursday a landmark energy reform bill that will open up the country’s state-controlled oil and gas sector to private and foreign investment for the first time in 75 years.

The 353-134 vote by the lower house will give private firms the opportunity to explore and extract the nation’s hydrocarbon resources and form profit- and production-sharing partnerships with state oil company Petroleos Mexicanos (Pemex).

The bill, which was signed off by the Senate just 24 hours earlier, has been now been passed to Mexican state legislatures for final approval, according to a statement on the lower house’s official homepage.

Following Thursday’s vote, President Enrique Pena Nieto said via Twitter that the changes will constitute a “fundamental transformation that will increase Mexico’s energy sovereignty and security”.

The chief element of the pending reform will be the shake-up of Pemex, founded in 1938 following the state expropriation of the country’s hydrocarbon resources.

For many Mexicans, the company embodies the ideal of national independence from foreign intervention. The bill, which requires controversial changes to the nation’s constitution, triggered vocal and chaotic scenes both on the streets and in Congress.

According to Mexican daily El Universal, scuffles broke out inside the lower house as opposition lawmakers attempted to block Thursday’s crucial vote, with one member of the ruling Institutional Revolutionary Party (PRI) taken to hospital with a “scratched retina”.

El Universal also posted images of a deputy for the leftist Democratic Revolution Party (PRD), which has opposed reform on constitutional grounds, stripping down to his underwear in an attempt to destabilise proceedings.

“Mexico has been dealt a blow to national sovereignty,” the PRD said via Twitter following the vote. “Our struggle will not be days or hours, but years.”

However, proponents of reform, including Pemex itself, argue that the company needs more autonomy from the state to increase competitiveness, boost investment and production and reduce bureaucracy.

In a message on the company’s official Twitter page, Pemex welcomed the lower house’s vote, arguing that reform would “improve the financial situation of the company and free up more resources for investment and maintenance”.

By: Simon West

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