MEXICO CITY — The Mexican government on Wednesday unveiled its proposed rules for a historic opening of its state-owned oil and energy industry, saying contracts and production licenses should be put out for public bid and go to the company that offers the best return.
Energy Secretary Pedro Joaquin Coldwell said private companies will not be allowed to immediately open gas stations to compete with state-owned Petroleos Mexicanos, which currently runs all stations under franchise or other agreements. He said private stations would be introduced gradually, as the necessary distribution and other infrastructure is made ready.
Joaquin Coldwell said that Mexican suppliers would be given preference in contracts over foreign firms in cases where both offer the same terms. And he said that Mexico would seek a 25-percent “national content” goal in energy projects.
The rules must still be approved by Congress.
Mexico nationalized the oil industry in 1938, but in recent years Petroleos Mexicanos has struggled with falling oil production and an inability to harness new gas and oil deposits in deep ocean water or in shale deposits.
A constitutional reform passed last year allows contracts for profit- and production-sharing, as well as licenses, in which companies pay royalties and taxes to the Mexican government for the right to explore and drill. Pemex would get first consideration for licenses.
Some fear a return to the days when foreign oil companies made fortunes in Mexico while leaving the country with little benefit.
But more than seven decades of state ownership have neither ensured prosperity for Mexico nor provided low gas and oil prices. A bloated union, corruption within the state-owned oil company and the government’s dependence on oil revenues to fund public spending have reduced any benefits that might have trickled down to the average citizen.
Oscar-winning Mexican movie director Alfonso Cuaron published a full-page ad Monday in Mexican newspapers questioning the energy reform, asking “when will prices for gas, gasoline, fuel oil and electricity come down?”
Coldwell said in answer to the questions from the “Gravity” director that energy prices in general would come down in “the middle term,” but that Mexicans would see a decline in the country’s relatively high electricity rates within two years after the enabling legislation is passed. He noted that Mexico currently imports gas at higher prices from abroad, because the state-owned company can’t produce enough at home.
Caldwell said that, in cases where oil and gas deposits cross international boundaries, Petroleos Mexicanos would have to have a 20-percent stake in any exploration or production deal.