Mexico Opposition Party, PRD, Proposes Limited Energy Reform

Reuters

MEXICO CITY, Aug 19 (Reuters) - Mexico's largest left-of-center political party proposed a plan on Monday that would revamp state-oil monopoly Pemex, but without amending the constitution to permit more private investment in the oil, gas and electricity sectors, as the government has proposed.

The proposal of the opposition Party of the Democratic Revolution, or PRD, would provide Pemex with budget and management autonomy, and create a new fund to administer the nation's energy riches.

The proposal would also gradually lower the company's tax burden by 9 percent to 62.5 percent by 2018, freeing up more resources to invest in exploration and production activities.

Unlike the more aggressive reform bills by President Enrique Pena Nieto of the centrist Institutional Revolutionary Party (PRI), as well as the conservative National Action Party (PAN), the PRD's bill does not include amending the constitution to permit more private investment.

The cornerstone of Pena Nieto's reform is a new profit-sharing contracting scheme aimed at luring private capital and boosting output, while the PAN calls for the establishment of concessions for oil and gas developments.

The energy reform is the central plank of a wide-reaching reform package Pena Nieto hopes will boost growth in Mexico, Latin America's second largest economy, and drag its energy industry into the modern era.

High-ranking government officials say Pena Nieto's proposal seeks to open up a range of new and mature oil and gas fields to private firms, and new partnerships with Pemex could be launched in the second half of next year.


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