Mexican lawmakers are unlikely to attempt any further reforms of the country’s oil sector after midterm Congressional elections in July, where the ruling conservative party is expected to lose some ground. The country’s battered economy, its fight with powerful drug cartels and the need for a major overhaul of the tax system are a higher priority for lawmakers than revisiting the sensitive topic of opening the tightly controlled oil industry to more participation by foreign companies.
Despite last year’s reform package, analysts expect Mexican oil production to end the year below the country’s 2.7 million barrels per day target. They have also questioned the feasibility of the country’s medium-term goal of lifting output back to 3 million bpd by 2012.
Government insiders acknowledge that last year’s reforms fell short of their goals, but ruling party lawmakers show little enthusiasm for revisiting the issue. The PAN is running six points behind the centrist Institutional Revolutionary Party, or PRI, in opinion polls and is set to lose seats in the lower house of Congress. Some in the PRI favor a structural oil reform, but it is unclear whether the party is willing to cooperate with Calderon’s party.
The Mexico Institute released a report in 2008 on the political economic dimensions of reform in Mexico’s energy sector, Oil in Mexico: Pozo de Pasiones, The Energy Reform Debate in Mexico.