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MEXICO'S HISTORIC OIL REFORM

Mexico is trying to bring life to a moribund industry. Mexico’s energy sector has experienced a hobbled production since 10 years, because of public monopoly. Pemex is the sole oil and gas producer, and Federal Electricity Commission controls the electricity production and distribution. The government is seeking to approve a law to bring in, private and international companies to invest in oil and gas and electricity generation.

Mexico is the third-largest exporter of petroleum to the U.S. and it is among the world top producers. In 2013, oil revenue funded 34% of national budget, and, in the last quarter of the year, 50 per cent of Pemex’s revenue ($16 billion) was paid in taxes to the government. According to some estimates, the reforms will add 1% on forecasted GDP of 2018. Private investors, like U.S. companies, might bring technology and capital, allowing also the country to generate jobs and profits.

Even though, the benefits that the reforms could bring, there are some controversies because in 1938, President Lázaro Cárdenas have nationalized the oil industry. The opinion is currently divided between who wants the state to keep owning the sector, and who do not.

President Peña Nietoannounced the reform in 2013 and it suddenly pasts to the Congress due to his pact with some opposition parties: the National Action Party on the right and the Party of the Democratic Revolution on the left. Then, 31 states legislatures signed it, now a package of 21 regulations that govern the nuts and bolts of how the reform will be implemented in debate. The government is going to hold its first auctions in this year. However, the Democratic Revolution would like to delay the launch of the reform.

The gLAWcal Team

February 12, 2015

(Source: U. S. news)

This news has been realized by gLAWcal—Global Law Initiatives for Sustainable Development in collaboration with the University Institute of European Studies (IUSE) in Turin, Italy and the University of Piemonte Orientale, Novara, Italy which are both beneficiaries of the European Union Research Executive Agency IRSES Project “Liberalism in Between Europe And China” (LIBEAC) coordinated by Aix-Marseille University (CEPERC). This work has been realized in the framework of Workpackages 4, coordinated by University Institute of European Studies (IUSE) in Turin, Italy.