President Enrique Pena Nieto offered a proposal Monday to open Mexico’s oil and gas industry to foreign investment.
He began selling it to a reluctant nation by saying the move would lower electricity costs, create jobs and revive Mexico’s status as a global energy power.
Flanked by much of his Cabinet, Pena Nieto said the plan would revitalize the oil and gas industry without selling out the giant state oil company to foreign interests.
“Mexican families will feel in their pocketbooks the benefits,” Pena Nieto said, “of our economy returning to faster levels of growth than at any time in decades.”
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The proposal was narrower in scope than some in the energy industry had sought. It offers foreign companies the chance to sign profit-sharing contracts to explore for and produce oil and natural gas, but it bars them from keeping some production for themselves.
That moderation figures to clear the way in the Mexican Congress and state legislatures for a historic change to the country’s economy.
Pena Nieto may see his six-year presidency ride on the outcome of the energy proposal, which he said would create millions of jobs and boost economic growth in a nation that’s one of the world’s top 10 oil producers.
The plan calls for amending two key articles of the constitution to allow foreign companies to explore for and produce oil and gas in profit-sharing arrangements with the state oil giant, Petroleos Mexicanos, known as Pemex, while keeping the company “100 percent” in state hands.
“The country remains the sole owner of petroleum reserves … and of the great company that is Petroleos Mexicanos,” Pena Nieto said. That addressed fears that the proposal would dilute control of one of the largest companies in Latin America and one that many Mexicans see as a national jewel, formed after the takeover of foreign oil companies in 1938.