Mexico should delay oil sector shake-up -lawmaker

By Catherine Bremer

MEXICO CITY, March 28 (Reuters) - Mexico's government should shelve a planned reform to revive the flagging state-run oil sector given passionate opposition to a possible clause to let in private partners, a top lawmaker said on Friday.

Mexico's ruling conservatives have been courting the two main opposition parties for weeks over a reform to shore up the oil industry, whose output and exports have been declining. President Felipe Calderon hoped a bill could be voted on before Congress winds down on April 30.

Yet left-wingers bitterly oppose proposals to lower barriers to private investment and permit private oil joint ventures to speed up Mexico's entry to deepwater fields, and they have been winning over centrist lawmakers whose votes Calderon needs to pass a new law.

"At this point they shouldn't present it," said lower house speaker Ruth Zavaleta, of the left-wing Party of the Democratic Revolution, or PRD.

"A reform should not be presented when what it is has never been clear, and when it has polarized society and people think that any bill that's presented here in the chamber is going to be privatization, even if it's not privatization."

Firebrand leftist Andres Manuel Lopez Obrador, who narrowly lost the 2006 presidential election for the PRD, is leading street protests against the idea of oil partnerships, which he says is tantamount to privatizing state oil monopoly Pemex.

"It's not the right moment to present any energy reform proposal and we should focus on other things such as education or labor issues," Zavaleta told reporters.

Many expect the PAN, which is finalizing its proposal this week after apparently giving up on a multi-party document, to present a watered-down bill restricting the entry of private partners to less controversial areas such as refining and include changes all parties agree on, such as giving Pemex more autonomy.

PAN Sen. Juan Bueno, an ex-Pemex director on the Senate energy committee, said this week the bill would not include risk-sharing partnerships.

Pemex Chief Jesus Reyes Heroles said this week that without foreign partners Pemex would not be able to start deepwater oil production in time to make up for a decline at its huge but mature Cantarell field.

Polls show half of Mexicans oppose private investment in the oil sector, expropriated in 1938, yet one survey also had nearly two-thirds of respondents saying they did not believe Calderon's reform plans included privatization. (Editing by David Gregorio)