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Did I say that? Peña Nieto and PEMEX

29 June 2013

Although I’m not a believer that polling statistics can be, and usually are, skewered to give the results desired by whomever is paying for the polls, this is interesting.  Polls conducted by CIDE (Centro de Investigación y Docencia Económicas — the Center for Economic Research and Education — a state-supported “think tank” leaning towards neo-liberal policies) and the Secretaría de Relationes Exteriores (the foreign ministry) found that only slightly more than half of Mexicans are open to foreign investment in Mexican electrical production and a clear majority (65%) REJECT any foreign investment in PEMEX.

What’s surprising about the statistics is that they come from the same  government that has been pushing for privatization (as was the previous, PAN administration), making the claim that PEMEX “doesn’t have the financial capacity to be in every single front of energy generation” as Enrique Peña Nieto said in London on his way to kowtow to the G-8 leaders.  However, news of a pending privatization bill has been pushed into the background in Mexican media, and — if there is this much rejection of the idea now — one can only expect it to grow as it becomes a better known issue.

I’ve been holding back writing anything about this, waiting on the administration bill, which was supposed to be submitted to the legislature earlier this week.  But wasn’t.

The so-called “Pact for Mexico” (an agreement among the three main parties to avoid squabbles over “necessary” legislation) is hanging by a thread, and will be revisited (if the pact still exists) after the state and municipal elections — 7 July… a week from this coming Sunday.  A key piece of that “pact”… sold mostly abroad, and kept out of the discussions here has been the “third rail of Mexican politics” … opening PEMEX to foreign investment.

In London, en route to the Belfast G-8 meeting, Peña Nieto made remarks to the English-language press that are taken to mean, as Bloomberg reports:

…he’s confident Congress will end the state oil monopoly this year, opening the way for companies such as Exxon Mobil Corp. and Royal Dutch Shell Plc (RDSA) to tap the nation’s reserves.

In the model envisioned by Pena Nieto, state-owned Petroleos Mexicanos would develop some fields, while others are tapped by foreign and private companies. He declined to discuss more details of the proposal, or whether it would require a change in the constitution.

Back home, the administration is looking to re-brand privatization not as opening Mexican oil to the same people the country threw out in 1938, but simply as some sort of cash infusion… based on what it seems is a false premise to begin with.  Not that the Mexican fields are producing less oil (they are, but they’ve been worked since the 1880s, and nothing lasts forever), but that PEMEX is an oil company.

Yes, PEMEX is one of the top ten oil producing companies in the world, but it is only an oil company in the same way that the U.S. Postal Service is a package delivery company.  That is, a state owned enterprise that does not have to return a monetary profit to its shareholders, but is expected to provide a service to those shareholders … and, in PEMEX’s case, it doesn’t have to sell oil, or even pump oil, since it’s purpose is to use the oil to the nation’s advantage.  Which may be leaving it in the ground, or using it domestically.

Of course, there is a good argument for bringing cash into PEMEX to permit it to pump more oil (and, maybe even get into fracking… like Peña Nieto mentioned in his London interview), but politically, it would be imprudent to say so at home.  So, when his push for privatization was challenged by Marcelo Ebrard, the former Federal District head of government (and presumed front-runner for the PRD in 2018)  he has tried to deny saying any such thing.

The former head of Government of DF, Marcelo Ebrard, already received response from the Presidency on a debate that requested with Enrique Peña Nieto, on energy reform which aims to promote.In a letter, signed by  Erwin Lino, private secretary to Peña Nieto, which incidentally was wrongly dated, the Chief Executive argues that he has not yet sent any initiative to the Chamber of Deputies or the Senate on this matter, therefore if Ebrard “has any comments or proposal “, he must send them to the Secretariat of Energy’s Undersecretariat for Hydrocarbon Development.

Don’t ask, don’t tell? But don’t be surprised if there are huge demonstrations and street actions if — or when — the issue does seep into the public consciousness.

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