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Strategies & Market Trends : Strictly: Drilling II

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To: Frank Pembleton who started this subject	8/17/2002 3:11:44 PM
From: Frank Pembleton	Read Replies (2) of 36161

Fox presents controversial energy reform bill to Mexico's Congress MEXICO CITY - President Vicente Fox ( news - web sites) submitted to Congress late Friday a long-awaited energy reform bill that proposes opening up Mexico's state-controlled energy sector to more private investment. The measure seeks to change two constitutional amendments and allow private companies to invest in Mexico's electricity sector and some refining and dry gas operations. The idea of loosening the government's grip on the energy sector is a touchy subject in a country where many politicians and much of the public revere the state-run oil and electricity monopolies with nationalistic pride. Speaking to reporters Friday night, Fox said the bill was designed to attract foreign investment for key infrastructure projects but would not threaten Mexico's oil and energy monopolies. "We expect dialogue and a reasoned debate," Fox said when asked if he thought lawmakers would pass the reform package. Mexico produces around 40,000 megawatts of electric power per year. The government estimates the country will have to produce a minimum of 60,000 megawatts by 2010, and that the necessary improvements to the power grid will cost dlrs 5 billion per year over the next eight years. Fox has maintained for months that increased private investment is the only way the country can adequately revamp its aging power grid. While Fox's National Action Party and the small Green Party support creating a private wholesale electricity market, the opposition Institutional Revolutionary Party and Democratic Revolution Party reject the idea. The Fox plan would open up to private investors some refining and dry gas operations but leave crude oil production under the control of the federal government through its oil monopoly Petroleos Mexicanos, or Pemex. The proposal also calls for modifying the legal definition of "public service" for the electricity sector, which would allow corporations and other large consumers to buy power directly from private generators. Energy laws currently allow private concerns to generate electricity for their own use, or to act as independent power producers under contract to the Federal Electricity Commission, the state-owned utility. The proposal would also allow the government to change some energy regulations without full congressional approval. story.news.yahoo.com

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