| MEXICO CITY
MEXICO CITY Aug 7 After a months-long delay in
passage of a landmark overhaul of Mexico's state-run energy
sector, the government now plans to accelerate the timetable for
inking joint ventures with private oil firms to reverse a slump
in oil output, a senior government official said.
Mexico's Congress put the finishing touches on an
energy-policy revamp on Wednesday night, approving bills that
implement a reform that ends the decades-old monopolies of
state-owned oil company Pemex and national power
company CFE and aims to lure billions of dollars in
The energy ministry will now announce a month ahead of
schedule which oil and gas fields Pemex will keep, following the
reform in a so-called 'Round Zero' allocation.
That in turn brings forward the timeline for tie-ups between
Pemex and major oil companies, which will also later be able to
operate alone, part of a wider economic reform drive spanning
telecoms to taxes that aims to boost Mexico's economic growth.
"Round Zero will be announced next week," a senior
government official told Reuters on condition of anonymity.
Oil majors like Chevron and Royal Dutch Shell Plc
have said they are eyeing new opportunities closely.
The cornerstone of the energy reform, a new hydrocarbons
law, sets out a new contractual framework that offers private
companies a cut of profits or production. But all-important
commercial terms will not be known until the finance ministry
sets them for upcoming public tenders.
"I think companies will be more convinced and satisfied once
they have contracts in their hands," said Miriam Grunstein, an
energy specialist with Mexico City's CIDE research institute.
"Right now, they have nothing."
The newly empowered hydrocarbons commission will regulate
the sector, supervise contracts, manage bid rounds, and sanction
violations including the power to rescind contracts.
Grunstein added that the hydrocarbons law forbids companies
from appealing the termination of contacts via international
arbitration, a departure from international best practices.
"That's a pretty deadly provision for any company," she said.
The final package of bills approved on Wednesday allow the
government to absorb a portion of the massive pension
liabilities shouldered by Pemex and CFE so long as both can
negotiate a leaner pension scheme with their respective unions.
Shifting a chunk of pension debt to the government was
pitched as way to prepare both for competition.
The energy ministry will determine which oil and gas fields
will be put up for bid starting next year.
"We are very encouraged," Jeff Miller, president of North
America's top oilfield services provider Halliburton,
said in an emailed statement to Reuters.
While reforms to the oil sector garnered most of the
attention during the debate, a complete opening of the power
sector will likely see the first investments. The reform creates
an independent grid operator as well as Mexico's first-ever
wholesale electricity market, long the sole domain of CFE.
(Editing by Simon Gardner and Alden Bentley)