Mexico Pres Hopeful Proposes Share Sale in New PEMEX Unit
MEXICO CITY Oct 04, 2005 (Dow Jones Commodities News Select via Comtex)
One of the contenders to be the presidential candidate of Mexico's largest opposition party proposed Monday selling shares in a new division of state oil monopoly Petroleos Mexicanos (PEM.YY), or Pemex.
Roberto Madrazo, who is vying to be the 2006 presidential candidate of the Institutional Revolutionary Party, or PRI, said the proposal is to create a unit of Pemex that is dedicated to exploration and production of non-associated natural gas, and to place 20% of its equity on the Mexican stock market as a way of raising capital.
The proposal is less ambitious than an earlier idea, which has been aired by government officials and mentioned favorably in the past by Madrazo himself, of selling Pemex shares on the stock market.
In a news conference with foreign reporters, Madrazo said Monday the idea "isn't incompatible" with the proposal made last month by President Vicente Fox, of the National Action Party, or PAN, to amend the constitution to allow private concessions to explore for and produce natural gas not associated with crude oil deposits.
But Madrazo stopped short of voicing support for that bill.
"Constitutional reform isn't the only way to have energy reform," he said, adding that the president has the prerogative to restructure public organizations such as state-owned enterprises or ministries.
Pemex's four main operating units are exploration and production, refining, gas and petrochemicals. It also has an international trading division, a corporate and a financial arm.
It is the world's No. 3 crude oil producing company, with average production around 3.4 million barrels a day. Pemex said Sunday that it produced 4.94 billion cubic feet a day of natural gas in the first half of September, including a record 4.99B Bcf/d on Sept. 16.
While Pemex has been obtaining declining amounts of gas from its crude oil deposits, its output from non-associated gas fields has risen steadily since 2001, and is currently close to 2 Bcf/d.
Despite being a major natural gas producer, Mexico still imports about a fifth of its natural gas needs from the U.S.
In calling for the constitutional amendment, Fox cited Mexico's dependence on expensive gas from the U.S. where prices soared after hurricanes Katrina and Rita affected oil operations in the Gulf.
The PRI, Mexico's largest political party, lost the presidency to Fox in 2000 elections, becoming an opposition party for the first time in its 71-year history.
Madrazo noted that the party changed its statutes earlier this year after heated internal debates to allow for contemplation of greater private involvement in the state-run energy sector through legal reforms.
"If we hadn't, I couldn't even be discussing these subjects," he said.
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