MercoPress. South Atlantic News Agency

Mexico approves opening oil industry to private sector

In a turbulent session, the Mexican Congress Tuesday approved seven bills reforming the state oil company Petroleos Mexicanos (Pemex), which holds a monopoly on the industry, to allow participation by private international firms.

Mexico's lower house voted 326 to 133 to approve the version passed by the Senate last week. According to the new legislation, Pemex is now set to be more autonomous from the state with private international companies allowed to take part in the modernization process. However private sources believe this won't be enough to attract sufficient investment to reverse declining production. Mexican oil production has dropped 10% this year to an average of 2.8 million barrels a day Mexican President Felipe Calderon put forward the initiative months ago, as a reaction to the country's falling oil production and decaying infrastructure. The reform allows deep-water exploration only on a straight contractual basis, instead of paying private companies based on the amount of oil they find. Private investment in the building and operating of oil refineries also was ruled out under pressure from leftist lawmakers. Former leftist presidential candidate Andres Manuel Lopez Obrador led the opposition effort against such a "privatization" of Pemex. Some 30 supporters of Lopez-Obrador, the former Mexico City mayor, occupied the speaker's podium in Congress in an effort to prevent a vote but were unable to prevent the vote. However, several members of his Party of the Democratic Revolution (PRD) voted in favor of the bill.