Mexico president polishes energy reform, delays unveiling

MEXICO CITY Wed Aug 7, 2013 11:08am EDT

MEXICO CITY Aug 7 (Reuters) - Mexico's government has pushed back to next week the unveiling of a proposed energy sector overhaul, as President Enrique Pena Nieto puts the finishing touches to a divisive bill that attempts to modernize an ailing oil industry, ruling party sources said on Wednesday.

The energy reform, which President Enrique Pena Nieto said on Tuesday would be presented this week, aims to lure more private investment into the oil, gas and electricity sectors to boost flagging output and drive growth in Latin America's No. 2 economy.

Lawmakers familiar with last-minute negotiations over the government's proposal say it will try to amend the constitution to allow more private investment in oil, gas and electricity by eliminating the exclusivity currently granted to the public sector in those businesses.

But with those last-minute tweaks taking longer than expected, the bill has now been pushed back to next week, sources familiar with the negotiations said.

"The president is signing off on details, revising article by article, and wants to present it with more certainty," said a senior ruling party source who requested anonymity because of the sensitivity of the bill.

In a speech on Tuesday, Pena Nieto said: "The energy reform that I am set to present in the course of this week aims to give Mexican companies ... access to a supply of cheap electric energy at internationally competitive prices."

But that quote was later cut from the presidential office's transcript of Pena Nieto's speech sent to the press.

The conservative National Action Party (PAN) last week presented its own proposal to reform Articles 25, 27 and 28 of the constitution, allow concessions for oil companies to exploit reserves instead of operating less lucrative service contracts, and strengthen the country's energy regulatory bodies by making them autonomous.

Pena Nieto will need PAN backing to secure the required two-thirds majority in Congress to pass the bill.

The leftist Party of the Democratic Revolution (PRD) has made it clear that it will not support constitutional changes, and will soon issue its own, much narrower, energy reform proposal.

"If they insist on modifying the three constitutional articles, but there are no proposals beyond constitutional reform, you can rest assured we won't support the reform," a senior PRD official said, asking not to be named.

Mexico is the world's 10th-biggest producer of crude oil, according to OPEC data. But output has fallen by a quarter since hitting a peak of 3.4 million barrels per day in 2004, driving home the need to kickstart production. (Reporting by Gabriel Stargardter, Anahi Rama, Ana Isabel Martinez; Editing by Simon Gardner)