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Mexico: Calderón pledges energy reform
El Universal ( Mexico)
Mexico City
Petroleumworld.com 03 29 07President Felipe Calderón says he will build political consensus to overhaul the energy industry, a move many see as crucial to promoting development and boosting economic growth in this oil- rich but poverty-plagued nation of 107 million.
Mexico, one of the world´s leading crude exporters and the No. 2 supplier to the United States, has seen its proven reserves fall.On Jan. 1, proven oil reserves were estimated at 15.51 billion barrels, or about 5.8 percent less than at the same time last year, and only enough to last about nine years at current production levels.
The president told the closing session of the Confederation of Industrial Associations (Concamin) on Monday night that a shared approach was needed "by the parties, the branches of government, the levels of government, society, the industrialists, the workers" that allows alternative ways to be examined for achieving a common goal.
He said that goal was "having quality energy products at prices that are competitive at the global level, that can support, under fair market conditions, Mexico´s industrialists."
Calderón said a competitive energy sector was needed that goes from being an industry that "finances the Mexican government, to an energy sector that promotes competitiveness, not only of the government but of the entire economy of the country."
Calderón said the cost of goods and services must be reduced, but he warned that this "is an issue so delicate and so important that what I have done and will continue doing is to establish a cautious and respectful dialogue with Congress, with political parties, and with the industry´s workers."
He said he had already started working on an analysis of Pemex - the giant state-owned oil company - and the entire industry, "so that, without anticipating a course or a prejudice in any regard, we can reach a common diagnosis."
Earlier this month, Pemex chief Jesús Reyes Heroles proposed changing the firm´s management model to overcome the "critical" situation the company faced.
He said Pemex only received income on four of every 10 barrels produced from Mexico´s proven reserves.
Pemex contributed some US$53.18 billion to the public coffers in 2006, or about 55.2 percent of total revenues and 93.2 percent of pre-tax profits.
The oil company´s contributions accounted for 37.7 percent of the government´s revenues, according to the Pemex official.
At the same time, Pemex´s debt had increased by the end of 2006 to some US$51.72 billion, and workforce-related liabilities amounted to some US$41.27 billion, Reyes Heroles said.
The Confederation of Industrial Associations had already asked the government, via the group´s new leader, Ismael Plascencia, for "energy reform that allows Petróleos Mexicanos and the Federal Electricity Commission (the state electricity monopoly) to use part of their resources for reinvestment" to improve quality of operations and competitiveness.
Pemex, created in the 1940s when President Lázaro Cárdenas nationalized the oil industry, has been treated as a cash cow by successive governments that have found it easier to tap the proceeds of oil exports than to fight the political battles necessary to broaden theinadequate tax base.
Business leaders complain that supply problems and the cost of electricity, gasoline, natural gas, basic petrochemicals and other fuels have a negative impact on the competitiveness of Mexican companies and job creation.
Calderón vowed to closely review the proposals made by the business community to increase energy industry efficiency, but "always keeping in mind the leadership role of the state and without giving up in any way, obviously, national sovereignty in energy matters."
Though Calderón, like predecessor and fellow conservative Vicente Fox, would like to open up the energy sector to private investment, he has stressed that any such move would not be a prelude to privatizing Pemex, which is viewed by Mexicans across the ideological spectrum as the crown jewel of the national patrimony.
El Universal 28 03 07
Copyright© 2007 El Universal. All Rights Reserved.
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