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World News

Thousands protest Mexico energy reform plan

MEXICO CITY (Reuters) - Thousands of people, some dressed in oil worker jumpsuits, protested a Mexican energy reform proposal on Sunday that leftists say is a veiled attempt to privatize the cherished state industry.

Decrying government plans to allow more private investment in state-run oil monopoly Pemex, protesters carried signs saying “This is a holdup!” and showed pictures of President Felipe Calderon holding a gasoline pump like a gun.

Mexico is the world’s sixth-largest producer of crude oil and the third biggest supplier of oil to the United States. But output and reserves are falling after years of underinvestment and decades of using Pemex as a government cash cow.

Police said more than 30,000 people marched through central Mexico City to gather in the massive Zocalo square, led by leftist firebrand Andres Manuel Lopez Obrador, who narrowly lost the presidency to Calderon in 2006.

“Calderon’s proposal is a privatizing reform that is going to damage the most valuable resource that we Mexicans have,” said Luis Reyes, a former engineer at Mexico’s National Petroleum Institute.

Supporters of the energy plan say Pemex has long worked with private companies and that Calderon’s plans only seek to harness private sector know-how, not to sell off Pemex.

“The state will never lose control of the company,” the Energy Ministry said in a statement on Sunday.

PEACEFUL RESISTANCE

The leftist Party of the Democratic Revolution and some smaller allies disrupted the upper and lower houses with round-the-clock protests this month to block Calderon’s plan.

They lifted the protest last week after the ruling National Action Party agreed to a broad debate on the issue, which Lopez Obrador celebrated as a defeat for the government.

“We blocked the attempt to privatize oil behind our backs,” Lopez Obrador said in a speech in the Zocalo. He warned that leftist lawmakers would take over Congress again if necessary.

But he said his anti-oil privatization movement would be peaceful, backtracking on earlier threats this year to take over oil installation and key Mexican airports.

“I’m sure that facing such insistence to violate the constitution and privatize the oil industry, (leftist) lawmakers will restart their peaceful resistance in both chambers (of Congress),” he added.

Calderon wants to sweeten oil field service contracts with bonus fees to attract experienced foreign partners that could help Pemex uncover new deepwater oil deposits and lift declining output and reserves.

Pemex on Sunday said it had launched a tender to expand a petrochemical plant on the Gulf of Mexico, underscoring Pemex’s reliance on private companies in some areas of its operations.

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