Mexican President Enrique Peña Nieto has his country on the precipice of historic constitutional reforms to its energy sector. Mexico’s oil and gas resources were nationalized in 1938, and while the country’s state-owned oil company Pemex has long been held as a point of cultural pride by many Mexicans, its production has stagnated in recent years. The Mexican government derives a third of its budget from oil revenues, leaving very little left over for Pemex to reinvest in its operations.It’s easy, then, to see why Peña Nieto has been so keen to open up the country’s outsized hydrocarbon reserves to foreign firms. But while the reform-minded president has his Institutional Revolutionary Party (PRI) on board with the constitutional reforms, he’ll need to bring members of the opposition National Action Party (PAN) on board to get the necessary two-thirds majority. Things are looking good on that front, as Reuters reports:
Pena Nieto needs two-thirds of the votes in Congress to change the constitution. But the PRI does not even have a majority, making it dependent on help from an opposition keen to cut back the party’s long-standing domination of Mexican politics.Some of the votes needed for the oil reform are likely to come from the conservative National Action Party (PAN) – which has made them conditional on electoral reform passing first.That is close to becoming reality.
If President Peña Nieto can seal a deal with the PAN on electoral reforms, energy reforms will likely follow soon after. The PRI’s Senate leader expects a vote as early as next week, and if all goes to plan, Mexico’s badly-needed energy reforms could happen before the end of the year. The sooner Mexico joins the great North American energy boom, the better.[Oil barrels image and Mexican Flag image courtesy of Shutterstock]