Mexico’s Plan to Open Oil Industry Lacks Support

(Bloomberg) — Mexican President Felipe Calderon’s plan to overhaul energy laws and allow private investment in the state oil monopoly lacks political support, a prominent opposition senator said.

Senator Francisco Labastida of the Institutional Revolutionary Party, an opposition group, said “there’s no chance” that “comprehensive reform” will pass. He spoke in an interview today at the senate building in Mexico City.


Failure to open the oil industry may mark the biggest political defeat yet for Calderon, who managed to win support for cutting pensions and raising taxes since taking office in December 2006. Mexico, the third-largest oil supplier to the U.S., needs the help of foreign and private companies to halt a decline in crude output and reserves, Calderon has said.

Cantarell, the nation’s largest oil field, is running out of crude. Taxes that exceed half of sales at state oil company Petroleos Mexicanos cut into its ability to invest in production.

Bloomberg