Mexican Ruling Party in Senate Shake-Up to Push Pemex Reform

MEXICO CITY, June 11, 2008 (Dow Jones Newswires)

Mexico's ruling National Action Party, or PAN, has replaced its Senate leader in a bid to drum up support for a controversial energy reform bill before Congress.

PAN Senator Gustavo Madero took over Wednesday as the party's leader in the Senate, in the place of Santiago Creel who held the position since 2006. Creel will remain as the president of the Senate.

PAN President German Martinez said Tuesday that Creel was replaced to give a renewed impulse to efforts to pass the energy reform bill presented in April by President Felipe Calderon, and was made with a view to next year's mid-term elections.

Martinez said the party will examine the performance of the PAN in the lower house, but that there are no plans to replace its lower house leader Hector Larios.

The energy reform, which would give state oil monopoly Petroleos Mexicanos, or Pemex, greater flexibility in granting service contracts, and open refining and product pipelines to private investment, is broadly opposed by the left-wing Democratic Revolutionary Party, or PRD, while some aspects of it lack support from the Institutional Revolutionary Party, or PRI.

Martinez said Madero was given the task of promoting the PAN's reform agenda, particularly the Pemex reform, as well as preparing for the 2009 "electoral challenges."

In 2006, the PAN became for the first time the largest party in both the lower house of Congress and the Senate, although it lacks a majority in either. The party is also seeking to avoid a repeat of the 2003 mid-term elections, when it suffered a serious setback and lost a quarter of its lower-house seats.

Since taking office in December 2006, Calderon secured enough opposition support to overhaul the state workers pension system and pass a tax reform, but the energy proposal has come up against tougher opposition given the political sensitivity of oil, an industry Mexico nationalized in 1938.

PRD legislators led a protest occupation of the main halls at the lower house and the Senate in April demanding that the energy proposal be submitted to a broad series of public debates, which have been going on for the past several weeks.

Martinez rejected opposition claims that the PAN was losing the debate, and that Creel was made the scapegoat.

"I categorically deny that impression that we're losing the debate; in any case the change is aimed at winning the majority of votes on the reform," he said.

MEXICO CITY, June 11, 2008 (Dow Jones Newswires)