Mexico leftist seizes oil reform to drive comeback

By Catherine Bremer - Analysis

MEXICO CITY (Reuters) - A firebrand Mexican leftist whose 2006 presidential bid sent jitters through Wall Street is back, leading protests against energy reforms after a year in the political wilderness.

Andres Manuel Lopez Obrador jammed Mexico City with protest camps for weeks after the July 2006 election, claiming his defeat was rigged, but he then fell from the radar screen as President Felipe Calderon took power, pushing through laws and battling drug cartels.

Now the anti-capitalist has seized on opposition to Calderon's oil reform plans to launch a comeback that could decide whether he survives to get another shot at the presidency in 2012 or fades away for good.

Lopez Obrador has an army of followers among the poor. Thousands came out late last month to cheer on his first big rally against talks in Congress on letting more private capital into Mexico's oil sector, under state control since 1938.

His support in the Party of the Democratic Revolution, or PRD, will be tested when it votes for a new leader in a March 16 contest pitting Lopez Obrador's ally Alejandro Encinas against a more moderate rival, Jesus Ortega.

A poll last week suggested that Encinas will win. That would set the PRD, the No. 2 political force in Mexico, on a more radical path with Lopez Obrador as its figurehead.

But an Ortega victory would hurt Lopez Obrador's political future and his ability to obstruct an oil reform.

"It is important to him. It's in his interest to keep the party under his control," said Marcela Bobadilla at Mexico's IMEP think tank. "And it's crucial in terms of political negotiations."

A former indigenous rights activist who briefly lived in a mud-floor hut among poor Mayans and is famous for his colorful jibes at opponents, Lopez Obrador spent last year touring rural towns across Mexico to rally his supporters.

He now threatens to blockade highways, airports and oil installations to protest legislation being mulled to allow profit-sharing alliances in oil. Lopez Obrador and other left-wingers say that would be tantamount to privatization.

One in five people polled by the daily newspaper Milenio last month said they would join his oil protests.

"He enjoys support on the issue even among those who do not support him politically," said political analyst Federico Estevez at Mexico City's ITAM university.

NO BLUFF

"It's not a bluff. He is convinced it has to be done," said Manuel Camacho Solis, Lopez Obrador's 2006 campaign strategist, of the blockade plan. "But the PRD may try to persuade him that certain things are not suitable as they will cost votes."

Core PRD lawmakers back the protests, saying they reinforce their stance in Congress.