Mexico’s lawmakers probably will approve sweeping constitutional reforms for the nation’s energy sector by mid-December, former Mexican President Vicente Fox said during a visit to Houston.
“I am very optimistic,” Fox said in an interview with FuelFix Friday evening.
The legislation would modify Mexico’s constitution to permit international companies to invest and share in the risks and rewards of Mexican oil projects.
Fox, who served as president from 2000 to 2006, was in Houston to speak at the IIT Global Energy Conference this weekend at the Hilton Americas downtown.
Fox changed the political landscape of the country by becoming the first leader in nearly a century to break the hold on Mexico’s presidency of the Institutional Revolutionary Party, abbreviated in Spanish as PRI.
But he and his National Action Party, PAN, failed to push through energy reforms during his tenure because PRI’s lawmakers blocked the proposal.
“I was a total minority,” Fox recalled. “I won with 44 percent of the vote and had no more than one third of the political position appointments. And I had very strong opposition.”
Mexico’s current president, Enrique Peña Nieto, of the PRI, has introduced similar measure again, and PAN has said it will work with the PRI to pass the constitutional amendment.
Fox sees sufficient momentum for meaningful changes to be adopted into law.
“My party, the PAN, has a lot of integrity,” Fox said. “It is not going to play as opposition in this case.”
Mexico nationalized its oil industry in the 1930s, creating a decades-long source of pride and identity, along with considerable resistance to changing the structure.
But the national oil company, Petroleos Mexicanos, or Pemex, is struggling with rapidly declining production and increased competition. Supporters of an overhaul say Pemex needs capital and expertise that it only can get if outside investors can share in the oil and gas produced rather than working only as contractors.
The left-leaning Party of the Democratic Revolution, or PRD, has organized large demonstrations in Mexico City protesting the constitutional amendment, saying that it would open the door to privatization of the oil industry. But Fox said that these protests do not have enough momentum to block passage of the constitutional amendment, given its support by the two leading parties.
“The conflicts on the streets are going to make it costly for the president to come up with the reform, but it will happen if Pena Nieto has a strong will and is determined for the change,” Fox said.
Mexican lawmakers are debating the proposal with an eye to a vote before Dec. 15, when Congress breaks for three months.
Fox cautioned that the international energy sector, which has watched several cycles of unsuccessful Mexican energy proposals in recent decades, will be looking for proof that Mexico is ready to change how it does business with the world.
“It has taken so long, that it must be good, profound reform,” Fox said. “Expectations are very high, especially by investors. If it doesn’t please them, or they don’t understand it, the effect we are looking for won’t be there.”