Mexican lawmakers from the opposition Institutional Revolutionary Party said time is running out to debate and approve an energy bill before Congress recesses April 30.
Senator Manlio Fabio Beltrones, the party leader in the Senate, urged President Felipe Calderon to present as quickly as possible his plan to loosen the state's monopoly on oil, which the government says is the only way Mexico can halt declines in output and reserves.
Calderon's inability to get a bill through Congress would be a failure for his administration, which has made energy reform a top political priority. Calderon needs the support of the opposition party, known as the PRI, to get the bill passed.
``It's not over until the fat lady sings,'' said Armand Peschard-Sverdrup, senior associate at the Center for Strategic and International Studies in Washington. ``But clearly the clock is ticking.''
Beltrones, speaking today in an interview on Radio Formula, said Congress may open an extraordinary session between May and August to debate an energy bill.
Calderon's National Action Party, known as the PAN, has drafted part of the energy reform package. The plan would allow state oil company Petroleos Mexicanos, known as Pemex, to join with private or foreign companies to develop wells that straddle the U.S. border.
Alonso Manuel Lizaola de la Torre, a PAN member in the lower house of Congress, said he had planned to present the initiative yesterday. Hector Larios, his party leader in the lower house, asked him to postpone it.
Border Fields
``To be able to realize contracts and agreements for the joint development of border fields is extremely important for Mexico,'' the proposal says, according to a copy provided to Bloomberg News by Lizaola de la Torre.
Calderon's party postponed presenting the initiative because of recent protests by opponents of the reform, including a rally in Mexico City's main square yesterday led by former presidential candidate Andres Manuel Lopez Obrador, Lizaola de la Torre said.
Lopez Obrador and members of his Party of the Democratic Revolution have promised to hold rallies at congressional buildings, airports and financial institutions to protest reformation of the energy industry.
Mexico's constitution reserves oil to the government, banning any outside investment in exploration or production. The country nationalized most aspects of the oil industry in 1938. Calderon is hoping to change secondary laws to allow private and foreign companies to team up with Pemex, which would retain ownership of the drilling projects.
Broader Initiative
Lawmakers from Calderon's party intend to present the border-well bill along with a larger energy initiative, Lizaola de la Torre said.
Emilio Gamboa Patron, PRI leader in the lower house of Congress, also said today that his party can't be rushed to pass an energy bill and time is running out.
Pemex generates about 40 percent of federal revenue. Crude output may drop by a third by 2016 unless partnerships with other companies gives it access to technology that would allow it to drill deepwater wells, the government has said.
Investment in the industry may help Mexico's economy as exports to the U.S., which buys over 80 percent of Mexican goods sent abroad, are falling. Mexico's central bank in January cut its economic growth forecast for 2008 by half a percentage point, to a range of 2.75 percent to 3.25 percent.
``Mexico is going to have to brace itself for what could be a severe and lengthy recession in the U.S. and the ripple effect on the Mexican economy,'' Peschard-Sverdrup said. ``Energy reform could help to neutralize that.''
Source: Bloomberg| by Adriana Lopez Caraveo & Jens Erik Gould
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