Mexico to reform laws to allow private concessions on its energy sources

By IVC Staff Reporter

Aug 12, 2013 04:40 AM EDT

Mexico is gearing to change their policy to allow private companies to invest in the energy sector, according to a top party leader. Cesar Camacho, head of Institutional Revolutionary Party (PRI), Mexico's ruling party, disclosed in a statement, "In no way is it a privatization. It is opening up the possibility for private capital to join public policies ... without going as far as concessions." 

The opposition however negates constitutional changes, as they fear it would monopolize thru privatization the country's oil wealth controlled by PEMEX, a state-owned oil company.

The reform will extend generous contracts to oil companies and will introduce shale gas reserves and deep water oil resources, PRI ruling party member Antonio Bernal said. Bernal also mentioned that the reform will amend articles 27 and 28 of the constitution to permit participation from the private sector. No details have been disclosed further as to the kind of involvement the private sector will be allowed on.

Currently, Article 27 states that the private sector is banned from participating on state-owned concessions such as production-sharing, oil or gas contracts to prevent exploitation and is for the sole preservation of the state. Article 28, on the other hand, emphasized that the country's energy sector should be exclusively controlled by public institutions.

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