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LATIN AMERICA

Opposition calls Peña Nieto’s oil reform lackluster and unnecessary

Both PRD and PAN disappointed over Pemex plans

PRD leader Jesús Zambrano speaks Monday about the Mexican government's oil proposal.
PRD leader Jesús Zambrano speaks Monday about the Mexican government's oil proposal. EFE

Just minutes after President Enrique Peña Nieto announced his proposed reforms for the oil industry, opposition political parties expressed their disappointment at plans to bring private investment into Mexico’s fledging state-owned energy sector.

Jesús Zambrano, national leader of the leftist Democratic Revolutionary Party (PRD), said Peña Nieto’s proposal was “essentially a privatization” of Petróleos Mexicanos, the state monopoly that has controlled the petroleum industry for 75 years. “If he says he will not privatize, then why does he need to change the Constitution?” Zambrano asked.

Peña Nieto said he would ask Congress to modify Article 27 – the nationalization law – to allow profit-sharing oil contracts and Article 28, which addresses monopolies.

The PRD leader said his party would this week present its own initiative for introducing warranted changes to Pemex, but without having to redraft the Constitution.

Former Mexico City Mayor Marcelo Ebrard, another PRD leader who has criticized Zambrano for signing on to Peña Nieto’s Pact for Mexico, has called for a plebiscite on the leftist grouping’s counter-reform plan.

Less than two week ago, Mexico’s conservative National Action Party (PAN) presented its own proposal for the oil industry, which coincides more with the president’s initiative than the left’s ideas.

[This measure] is not a very strong visionary approach”

PAN officials believe that changes in the Constitution must be made to allow foreign investment in Mexico’s oil industry. However, their plan calls for shared production contracts while Peña Nieto is proposing profit-sharing contracts under a risk-sharing model.

In a radio interview, PAN president Gustavo Madero called the president’s initiative “very timid” because it doesn’t include granting concessions to private oil companies in exchange for a fee, as his party is proposing. "[This measure] is not a very strong visionary approach” because it fails to end the monopoly that Pemex enjoys and also fails to open the company to meaningful competition, he said.

The conservative party’s plan also calls for banning the powerful STPRM oil union from serving on the Pemex board.

Carlos Romero Deschamps, the union’s leader who attended Monday’s presentation at Los Pinos presidential palace, called Peña Nieto’s offer “a positive measure” but said the membership needed to see the fine print in the text that would be sent to Congress before taking a position on the proposed reform.

“What is good for Mexico will be good for all,” he told reporters after the ceremony.

The reform is expected to pass in both chambers of Congress with enough votes from PRI and PAN lawmakers, who together make up the three-quarters of the vote needed for the bill to be approved. After that, 17 of Mexico’s 32 states and Federal District legislatures must approve the amendments.

Andrés Manuel López Obrador, the former PRD presidential candidate who split from his party to form his own leftist movement, Morena, posted a video on the internet at the same time the ceremony was taking place in which he accuses the government of lying about Pemex’s financial state.

“Just some days ago, [Energy Secretary] Joaquín Coldwell mentioned that Pemex was a bankrupt company, with no operating income or profits and that is why the so-called private capital was needed and above all, foreign capital,” he said.

Later on his Twitter account, López Obrador called Peña Nieto’s drive “the robbery of the century.”

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