By Dave Graham and Adriana Barrera
MEXICO CITY Dec 6 Mexican senators on Friday
were near agreement on offering private companies lucrative
contracts to drill for oil, but the draft constitutional
reform's presentation was delayed to allow details to be
Officials said Senate committees could unveil the reform at
the weekend and start debating one of the cornerstones of
President Enrique Pena Nieto's economic reform drive on Monday.
State monopoly Pemex dominates Mexico's oil industry, which
was nationalized in 1938. The government wants to attract
private investment to revitalize crude output, down 25 percent
from its peak in 2004. But any full-blown concessions to private
companies would draw fierce opposition from many in Mexico,
where the oil industry is a source of national pride.
The ruling Institutional Revolutionary Party (PRI) has been
at loggerheads with the conservative National Action Party (PAN)
on details of the reform, with the PAN pushing for contractual
schemes including licenses and the production-sharing contracts
favored by oil companies.
Lawmakers, speaking on condition of anonymity, told Reuters
the meeting could be moved to the weekend.
PAN Senator Francisco Dominguez, who sits on the Senate's
energy committee, said the PRI and PAN were very close to
agreement on the kinds of contracts that could be offered,
including licenses that could give more control to oil companies
"We are going to do a combination ... We are keeping it
open," Dominguez told Reuters in a telephone interview. "Why tie
our hands, when it depends on how production is going, how the
economy is doing, what the oil price is."
"There are various combinations. We are not going to tie
ourselves to one model," he added. "The PAN proposed
concessions, but that creates a lot of noise. Licenses are
exactly the same, and that's what they use in different places
like Brazil and Norway."
Ownership of the oil would remain in state hands, as the
government has insisted.
Dominguez said there would be no reform document ready to
send to the committees until Saturday evening at the earliest.
An aide for a PRI senator also said discussions were leaning
toward license-style contracts, and said lawmakers were also
discussing to what extent national industry would be favored by
the reform, as the PAN demands.
A senior PRI lawmaker who asked not to be named said
negotiations aimed to create space for companies to participate
across the chain of production and commercialization. It would
also allow companies to book the monetary value of reserves
without legally owning them.
"We're working on what the proper scheme for contracts would
be," the aide said on condition of anonymity, given sensitivity
over the discussions. "Being as flexible as possible on the
contracting side, without going all the way to concessions."
In July, the PAN proposed a constitutional reform that would
allow more lucrative concessions but a month later President
Enrique Pena Nieto proposed more limited profit-sharing
The leftist Party of the Democratic Revolution (PRD) opposes
opening the sector to private companies, and last week pulled
out of talks over the reform. Many observers expect this
decision to push Pena Nieto's party toward a more
market-oriented bill to win support from the conservative
Pena Nieto says the overhaul is needed to lure more private
investment to lift flagging oil output in Latin America's No. 2
Enrique Burgos, a PRI senator who leads the committee
overseeing constitutional issues, said on Thursday the reform
would encompass elements from all the parties' proposals before
committees begin to debate it.
"I expect it to include the different options," he said.
Mexico's lower house on Thursday gave general approval to an
electoral reform the PAN has demanded as a condition for its
support in pushing through the energy bill.
Long the dominant force in Mexican politics, the PRI lacks a
majority in Congress and needs PAN support to pass the energy