After 75 years of state control over oil and gas production, the Mexican government is planning to open up about two-thirds of its reserves to bidding by private companies, according to information that Petróleos Mexicanos (Pemex), Mexico's state-owned oil monopoly, passed on to potential bidders on March 28. This is the first indication of what can be expected from President Enrique Peña Nieto's controversial "energy reform" program. Changes to the Constitution enabling the program were passed by Congress and a majority of states in December, over strong opposition from grassroots organizations and parties on the left; doubts about contracting out oil and gas exploitation increased following fraud allegations against a major Pemex contractor, Oceanografía SA de CV.
Pemex estimates that Mexico has reserves of oil and gas totaling some 112.8 billion barrels, but more than half (about 60.2 billion barrels) is in unconventional sources such as shale gas. PEMEX is asking for control over about 31% of the total, but most of this would be in proven reserves that can be exploited by conventional means. Outside contractors would be bidding largely for shale deposits and oil reserves deep in the Gulf of Mexico; Pemex is seeking just 15% of the shale reserves, for example. However, private contractors will continue to be involved in Pemex's operations, as they are now.
The government claims that the program will increase production from 2.5 million to 6 million barrels a day. Martí Batres, president of the newly formed center-left National Regeneration Movement (MORENA) party, called the production goal irrational. "This will also produce more greenhouse gases, global warming and other environmental consequences," he said. (Reuters, Apr. 26; La Jornada, Mexico, March 29; Mexican Labor News & Analysis, March 2014)
Activists slain in Oaxaca
In other news, two activists, Ignacio García Maldonado and Emanuel López Martínez, were shot dead on the early morning of March 29 while they were driving near Ciudad de las Canteras in the southern state of Oaxaca. García Maldonado belonged to the Popular Assembly of the Peoples of Oaxaca (APPO), a leading force in a movement that paralyzed much of the state for months in 2006. The two men had been involved in peace talks between two communities in the Sierra Sur region, Santiago Amoltepec and San Mateo Yucutindoo, and they were traveling in a vehicle borrowed from the Human Rights Advocacy of the Human Rights of the Peoples of Oaxaca (DDHPO), apparently as part of this work. Oaxaca attorney general Joaquín Carrillo Ruiz promised a speedy investigation of the double murder. (LJ, March 30)
From Weekly News Update on the Americas, March 30.