MercoPress. South Atlantic News Agency

Mexican government prepares sweeping reform for the energy sector

Peña Nieto expects the initiative to be debated in mid August during a special legislative period

Mexican President Enrique Peña Nieto has announced a sweeping energy reform, which is expected to include constitutional changes to lure private investment and boost output, will be presented to Congress next week

The energy reform is a key plank of a wider economic overhaul designed to boost growth in Latin America's number-two economy to 6% a year, create jobs and lower energy costs.

“The government will be presenting my initiative, the initiative of the government, in the coming days, I think next week,” Peña Nieto said on Thursday from the hospital where is recovering from the surgical removal of a benign nodule on his thyroid gland. He gave no details about the bill.

A top lawmaker from Peña Nieto's ruling Institutional Revolutionary Party, PRI, said on Wednesday he expected the reform to be presented on Aug. 7.

Peña Nieto said he hoped the initiative would be debated by Congress during a special legislative period set to begin in mid-August, setting up what is likely to be a heated debate over the future of Mexico's oil riches.

Mexico's current sole oil and gas operator is the state-run monopoly Pemex.

Mexico's opposition conservative PAN has also proposed its own aggressive energy reform, which would dismantle the current ban on concessions and risk-sharing contracts in addition to a broad opening of the electricity sector and the creation of a fund to administer Mexico's oil wealth.

Peña Nieto needs PAN backing to secure the required two-thirds majority in Congress to pass the bill. The PAN proposal raises the likelihood the government will push through a deep reform.