UPDATE 1-Mexico gov't seen seeking compromise oil reform
(Adds detail and quote from street rally)
MEXICO CITY, March 25 (Reuters) - Mexico's ruling conservatives are finalizing a proposal to overhaul the flagging oil sector and could appease leftists by toning down plans for private alliances, lawmakers said on Tuesday.
Senators for the governing National Action Party, or PAN, were locked in discussions over their vision for a long-awaited energy reform, and an advisor to the party said they should complete their blueprint at the end of the week.
PAN Sen. Juan Bueno, an ex-director of state oil monopoly Pemex and on the Senate energy committee, indicated the bill could limit the entry of private partners to areas like refining, given left-wing opposition to oil joint ventures.
"We are in the final phase," Santiago Creel, who leads the PAN's Senate delegation, told reporters.
"We are not going to jeopardize oil output or oil revenues in any formula we put forward. These are the two fundamental premises that we are working on now in the last stage," Creel said.
An energy law -- President Felipe Calderon's most ambitious reform attempt since taking power in December 2006 -- is seen by all parties as vital, as Mexico's oil output and reserves slide and a lack of refining capacity forces higher fuel imports.
All parties want to give Pemex more flexibility and autonomy, but a split over whether to relax barriers to private investment in oil exploration and production is hampering lawmakers' ability to come up with a multi-party proposal.
With only five weeks before the congressional session wraps up, the PAN could drop its hopes of permitting risk-sharing oil contracts with foreign partners to speed Pemex's entry into deepwater oil and settle for a more basic reform.
"The idea is to get the best possible consensus," said the PAN advisor, who declined to be quoted by name.
Bueno stopped short of mentioning oil partnerships in comments published by the daily Excelsior on Tuesday.
Instead, Bueno said an energy bill could give Pemex more autonomy, cut its taxes and allow private investment in less controversial areas like refining, pipelines and storage.
A MATTER OF SPEED
Left-wingers led by firebrand Andres Manuel Lopez Obrador held a rally on Tuesday against private oil partnerships and repeated threats to increase protests.
"Civil resistance will begin once the initiative to private oil is presented," Lopez Obrador told thousands of supporters. Continued...
