December 4, 2013
The great controversy playing out over oil reform this month in Mexico will be central to Mexico’s economic future. Can declining oil production be turned around in order to support an expanding industrial economy rivaling the BRICs and become a global manufacturing hub? This oil reform is so important for Mexico that it is the number one plank in President Enrique Pena Nieto’s “Pact for Mexico” modernization program.
The outcome also matters a lot to the United States, both as a top trading partner and in terms of whether economic growth in Mexico will reduce illegal immigration and pressure on the border between the two countries.
December 4, 2013
Global oil majors from Exxon Mobil Corp. to Chevron Corp. are about to get the clearest indication yet of how far Mexican lawmakers will go to lure them into the largest unexplored crude area after the Artic Circle.
Senate committees will begin debating a bill to end a seven-decade state oil monopoly as soon as today. On the agenda is a proposal by members of President Enrique Pena Nieto’s Institutional Revolutionary Party, or PRI, and the National Action Party, or PAN, to extend a profit-sharing model unveiled in August by also allowing production sharing or a license model used in Brazil, said two people with knowledge of the talks.
December 2, 2013
Global Post, 11/28/2013
The head of Mexico’s main leftist party said on Thursday it had pulled out of a cross-party pact on economic reform, which could push the government toward a more radical plan to spur investment in the oil industry wanted by conservatives.
Such a move could herald more intense opposition in the street to President Enrique Pena Nieto’s plans to open up the state-run energy industry to greater private investment.
December 2, 2013
BBC News, 12/1/2013
Tens of thousands of people have protested in the centre of Mexico City against President Enrique Pena Nieto’s planned overhaul of the energy sector.
Opposition leader Andres Lopez Obrador told the crowd to surround the Congress this week. Mr Pena Nieto says the plan to allow private investment in the oil and gas sector is needed to boost the economy. His approval ratings have slumped to their lowest since he took office a year ago.
November 26, 2013
By Laura Dawson, Christopher Sands, and Duncan Wood
The San Diego Agenda came out of the North American Competitiveness and Innovation Conference (NACIC) held in San Diego October 27-29, 2013 where Canadian Trade Minister Ed Fast, Mexican Economy Secretary Ildefonso Guajardo and U.S. Commerce Secretary Penny Pritzker met to discuss “three countries, two borders, one economy.” In this publication, Duncan Wood, Chris Sands and Laura Dawson argue that North American economic integration must be deepened in order to compete more effectively globally.
Read the full publication here.
November 21, 2013
The Economist, 11/21/2013
A year ago Enrique Peña Nieto became Mexico’s president, promising a series of reforms aimed at raising the country’s unimpressive economic growth. To overcome a dozen years of legislative gridlock, he struck a “Pact for Mexico” with the opposition. All this sparked enthusiasm in the markets and led to talk of a “Mexican moment”.
In his first year, Mr Peña has done much of what he promised (see article). He has weakened the teachers’ union, which was resisting his education reforms, by arresting its leader on suspicion of embezzlement. He has created an autonomous trustbuster to challenge the dominance of Telmex, controlled by Carlos Slim, the world’s richest man, and Televisa, a big television company. A banking reform should make lending easier in a country where credit as a proportion of GDP stands at little over half the Latin American average.
But Mr Peña has had to trim. In particular, he dropped his plan for a thorough overhaul of the tax system. Instead, his finance minister cobbled together, with the Party of the Democratic Revolution (PRD), the leftist opposition, an ill-thought-out ragbag of tax rises that has infuriated the private sector. That matters, since the economy is languishing.
Mr Peña now has a golden opportunity to redeem himself and to revive the private sector’s spirits. The most urgently needed reform is of the energy sector.
November 21, 2013
The chief executive of Mexico’s state-run oil monopoly Pemex PEMX.UL on Wednesday criticized the compensation paid to the chairman of Spain’s Repsol (REP.MC) as excessive, amid a tussle over the handling of a dispute involving Argentina.
Emilio Lozoya, CEO of Pemex – which has a 9.4 percent stake in Repsol – also told Mexico’s Congress that the oil giant was not looking to tie up with Mexican billionaire tycoon Carlos Slim in a bid to oust Repsol Chairman Antonio Brufau.
Argentina seized Repsol’s majority stake in Buenos Aires-based energy firm YPF (YPFD.BA) last year, arguing it had not done enough to invest in output.
November 18, 2013
The New York Times, 11/18/2013
The fight to revamp Mexico’s moribund, state-run oil industry could start as early as this week with a Senate proposal to allow private access to the country’s oil, a nationalist symbol that for decades has been fiercely protected by the constitution from possible profiteering by foreign companies.
Legislators from the two parties supporting an oil overhaul say they support constitutional changes to allow the government to grant licenses and share oil and profits with multinational giants such as Exxon or Chevron. The anticipated proposal would go much further than the plan introduced by President Enrique Pena Nieto in August, which would have allowed the sharing of profits but not of oil.
November 15, 2013
The Globe and Mail, 11/15/2013
Just about everything except the mouths of politicians seems to the paralyzed in the U.S. political system, especially Congress. Getting one big thing done seems next to impossible.
In Canada, the government can get things through the Commons and Senate, courtesy of its majority in both houses. But negotiate with the opposition parties? Are you crazy?
In Mexico, by contrast, something remarkable and controversial is unfolding. In less than a year, President Enrique Pena Nieto and his party are negotiating with both other parties in Congress on an array of reforms that would leave the legislatures of Canada and the United States breathless.
November 14, 2013
Accused a generation ago of engineering the “perfect dictatorship,” Mexico’s ruling party is now close to agreeing on a plan that could weaken the presidency and strengthen Congress in order to win votes for a major energy reform. The Institutional Revolutionary Party (PRI) and its opposition rivals are shortly expected to unveil the blueprint for a reform aimed at giving Congress greater oversight of government and allowing lawmakers to serve consecutive terms.
Billed as a step forward for democracy, the electoral reform is a bargaining chip for President Enrique Pena Nieto’s most ambitious plan – changing the constitution to allow more private capital into the state-controlled oil industry.
The energy bill is the central pivot of a broader drive for change from telecoms to education that Pena Nieto hopes will help boost Mexico’s economic growth, which has long lagged that of other countries in the region.