Mexico: Congress to vote on bill ending PEMEX monopoly
The bill would end the restrictive laws that have kept private companies out of oil and gas production, except for service companies working under contract to Pemex. The changes allow the government to partner with private firms through different kinds of contracts, according to the final draft, sharing with them the risks of exploration activities.
Mexico will allow profit-sharing contracts, where oil firms are paid in cash; production-sharing contracts, where oil barrels are divided between the government and the companies; and licenses, through which the firms take control of oil at the well head, paying royalties and taxes to Mexico. Licenses mimic concessions, although formally concessions will continue to be forbidden.
This would end the 75-year state monopoly. Pemex’s oil production has been in steady decline.
Enrique Krauze NYT’s op-ed on Mexico’s Theology of Oil.