Mexico Leader Said to Seek Changes to Break Oil Monopoly

August 7, 2013

Mexican President Enrique Pena Nieto will seek to amend several articles of the constitution to break Petroleos Mexicanos’s monopoly in the state-run oil industry, ruling party President Cesar Camacho said.

Pena Nieto will propose production-sharing contracts for oil exploration and output, Camacho said in a phone interview today. The proposal will seek to change articles 25, 27 and 28 of the constitution, and tenders for the most part would be managed by government regulators, and not by the state-company known as Pemex, two people with direct knowledge of the bill said yesterday. They asked not to be named because the bill will be officially presented later this week.

The overhaul would be the biggest change for the industry since 1938, when President Lazaro Cardenas seized oil fields from British and U.S. companies and changed Mexico’s charter to assert control over its energy resources. Pena Nieto’s proposal also would break the electricity distribution monopoly held by state power company Comision Federal de Electricidad, or CFE, according to one of the people.

Copyright: Bloomberg, 2013.