Mexico lawmakers try to halt oil bill

Leftist lawmakers padlocked and placed chairs over the doors of the chamber of deputies Wednesday to prevent debate on a major energy reform bill that passed the Senate hours earlier.

  • Published: 12/12/2013 at 04:49 AM
  • Newspaper section: breakingnews

Mexico's Democratic Revolution party (PRD) lawmakers make a barricade to seal the entrances to the chamber of deputies on December 11, 2013 in Mexico City.

Around 20 legislators took over the lower chamber's podium, unfurling a banner with the words "traitors" after senators approved legislation aimed at opening the state-run energy sector to foreign companies for the first time in 75 years.

"We cannot allow a handful of people to take and give away the nation's property," deputy Maria Luisa Alcalde of the Citizen Movement Party said from the podium, joined by members of the Democratic Revolution Party (PRD) and the Workers Party.

Chairs were piled over each other in front of one door while chains were wrapped around another. The left, which sees the reform as an attempt to privatize state-run company Pemex, wants the reform to be put before Mexicans in a referendum.

The bill is the centerpiece of President Enrique Pena Nieto's reform drive, which has included new tax collection, telecommunications and education laws in an effort to revitalize Latin America's second biggest economy.

The legislation would let private firms explore and extract oil and gas, as well as share profits, production and risk with Pemex, ending a ban cemented in the country's very constitution.

Pena Nieto tweeted that the vote was "a significant decision for Mexico" that would allow the country to "make the most of its resources to grow economically and create jobs in the coming years."

Pena Nieto denies Pemex will be privatized and insists the oil will remain in the nation's hands.

The Senate voted 95-28 for the general outlines of the bill in a midnight vote before approving the details in an all-night session that ended early Wednesday.

If it passes Congress, the reform will have to be approved by 17 of Mexico's 32 federal entities.

The proposed constitutional changes stem from a deal between Pena Nieto's centrist Institutional Revolutionary Party (PRI) and the conservative opposition National Action Party (PAN).

Analysts say the bill goes further than Pena Nieto's original proposal. Supporters of the reform say it is badly needed to give Mexico the tools to drill for more gas and oil and reverse a trend of falling production.

"In a historic session, we have set the basis for a new model for Mexico's energy sector," Senate energy committee president David Penchyna tweeted.

But the PRD has branded the plan as treason and as a sell out to US oil companies, calling the legislation a bid to privatize a symbol of national sovereignty.

Demonstrators who had set up camp outside the Senate for days moved their protest to the chamber of deputies, holding signs reading "Black gold is not traded for knick knacks."

Pena Nieto says the reform is needed to boost oil production, which has dropped from 3.4 million barrels per day in 2004 to 2.5 million today.

The bill proposes contract and licensing schemes that fall short of more controversial concessions. Lawmakers have yet to define the exact nature of such contracts.

The legislation also would remove Pemex's powerful union, which has been tainted by corruption allegations, from the company board.

Changes to the oil sector strike at the heart of modern Mexico's national identity.

In 1938, then president Lazaro Cardenas nationalized the foreign-operated oil industry, a wildly popular move that asserted Mexico's right to its own mineral wealth.

The government also founded Pemex, which despite its many problems, remains one of the country's most important sources of income from exports.

Energy industry consultant David Shields said it would take "months and years" for the changes to start making a difference.

"The positive thing is in the face of an industry that needs to change, needs more investment and more technology, we are giving it a roadmap for the coming years," he said.

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