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Mexico starts talks on cross-border oil, Kessel says
MEXICO CITY & MONTERREY
Petroleumworld.com, May 9, 2008
Mexican Energy Minister Georgina Kessel said Mexico is making diplomatic contacts to ensure it retains its share of oil in cross-border Gulf of Mexico fields.Kessel told Mexican legislators today that the energy reform bill introduced in April by Mexican President Felipe Calderon calls for giving state-run oil company Petroleos Mexicanos the authority to comply with international accords reached by the government concerning cross-border production, exploration and development.
``The Mexican government has initiated diplomatic contacts to take advantage of the hydrocarbons our country has along the border,'' Kessel said.
The government has raised concerns that companies drilling on the U.S. side of the Gulf near Mexico's border may extract oil that belongs to Mexico. San Ramon, California-based Chevron Corp. has drilled two wells in its Trident Field that are less than 6 kilometers (3.7 miles) from the Mexican side of the Gulf of Mexico, Kessel said during an April 28 presentation.
Pemex, as the Mexico City-based oil monopoly is known, is barred under current law from forming partnerships with companies to extract oil. The bill seeks to give Pemex more leeway to contract companies to help it drill, refine and transport crude oil, allowing the company to spend more on deepwater exploration and stem a decline in oil production.
Legislative Debate
Congress approved 71 days of debate on the bill starting May 13. Opponents of the bill, led by former presidential candidate Andres Manuel Lopez Obrador, say the government wants to hand over Mexico's oil industry to foreigners and a small group of rich Mexican businessmen.
Kessel told legislators that Pemex's exploration and production unit today contracts out 63 percent of its business to foreign and local service companies. The bill is designed to improve the efficiency of contracting procedures, which are based on government agency procurement laws.
In response to complaints from opposition legislators that the bill is a ``backdoor'' maneuver to privatize Pemex, Kessel said the company now imports 40 percent of Mexico's gasoline needs because of a lack of funds to build refineries and prevent crude production from falling.
``It's preferable to have these jobs, economic growth and investment in Mexico rather than transfer them to the rest of the world through imports,'' Kessel said.
Story by Adriana Lopez Caraveo in Mexico City and Thomas Black in Monterrey from Bloomberg
-adrianalopez@bloomberg.net; tblack@bloomberg.net.
Bloomberg 09 05 08Copyright© 2008 respective author or news agency. All rights reserved.
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