海角大神

It鈥檚 as entwined with Mexico's national identity as mariachi music,聽mole聽sauce, and the national soccer squad.

Pemex 鈥� the national oil monopoly Petroleos Mexicanos 鈥� has long been a powerful symbol of Mexico鈥檚 sovereignty in the face of foreign interests that would exploit the country鈥檚 energy resources. But it has also been isolated from foreign investment, making it difficult to keep up with technological advances or Mexico's growing energy needs.

President Enrique Pe帽a Nieto proposed聽Monday聽to overhaul the regulatory plan that has聽forced聽that isolation, opening the door to deals with global energy companies. Analysts say Mexico鈥檚 economic future 鈥� and the competitiveness of North America in the global economy 鈥� is at stake.

鈥淲ithout a different arrangement to exploit the hydrocarbons that we have, we鈥檇 be losing out on potential for growth,鈥� says Montserrat Ramiro, director of energy projects at the think tank Mexican Institute for Competitiveness.

'The oil is ours!'

The reform comes at a critical moment for Mexico. The shallow-water deposits Mexico depends on are running dry. At current production rates 鈥� on the decline for nearly a decade 鈥撀燩emex only has 10 years of reserves left. The company has made deepwater discoveries but doesn鈥檛 have the technological expertise to extract the hard-to-reach oil. The country is believed to store ample shale oil and gas, but Pemex doesn鈥檛 have the know-how to get at that energy, either.

Analysts say Pemex needs tens of billions of dollars in private investment to modernize. The reform would allow profit-sharing contracts in which outside players could explore for oil in partnership with Pemex.

But it stops short of letting outside companies own the oil they pump.聽It blocks the concessions that may be needed to lure the majors like Exxon Mobil or Chevron, but which amount to a nonstarter for many聽Mexicans who have grown up to the repetition of mantras like 鈥淧emex won鈥檛 be sold!鈥� and 鈥淭he oil is ours!鈥澛�

Still, 鈥渋f you have a contract that divides profit, it can be used to the same purpose as a concession,鈥� says Ms. Ramiro. 鈥淢y perspective is that it is definitely on the right track.鈥�

罢丑别听聽on proposed reforms聽cites Brazil, Colombia, and Norway as examples to follow; all three countries have a state-owned oil company that accepts varying degrees of partnership.聽

Yet if Pemex must act as a partner in every production contract, 鈥渢he problem is that you limit the expansion of your oil industry once Pemex capacity is maxed out,鈥� says Duncan Wood,聽director of the Woodrow Wilson International Center for Scholars'聽Mexico Institute in Washington.

More flexibility?

Pemex鈥檚 inefficiencies are legendary, and the administration has said its goal is to create a nimbler, more efficient business than exists today.聽Energy Secretary Pedro Joaquin Coldwell cited one telling statistic while presenting the reform: Public investment in Pemex has increased sevenfold in 15 years to $20 billion annually, but production of crude oil and natural gas has fallen, suggesting waste in the system.聽

The text of the reform proposal draws a comparison: Oil companies in the US drilled 137 deepwater wells in 2012, while Pemex drilled just six. More than 70 companies participated in the US drilling, while 鈥渋n Mexico the risk and responsibility falls on just one.鈥�

The reform 鈥減uts an end to these negative trends that threaten the country鈥檚 energy, the economy of families, and the competitiveness of businesses,鈥� Mr. Coldwell said.

Mexico鈥檚 central bank recently reduced its expectations for growth this year to between 2 percent and 3 percent, down from 3 percent to 4 percent.聽Analysts note that energy is one of the sectors holding Mexico back.

There are other key elements to the reform. It would substantially reduce the company鈥檚 tax burden 鈥撀燩emex currently supplies a third of the federal budget 鈥撀燼nd allow part of what it pays the government to be turned around and reinvested in operations. The reform would also break the national electricity monopoly鈥檚 grip on the distribution of electricity nationwide.

A political battlefield

Now weeks of聽legislative聽debate follow. While political parties fuss over how the reform is worded, US and foreign oil companies will want to know one thing when all is said and done, says Houston-based energy analyst George Baker: 鈥淎re you going to put a commercial deal on the table or not?鈥�

Mr. Baker says that, should the reform pass, he expects the first contracts between Pemex and foreign players could be two to four years out.

The president鈥檚 Institutional Revolutionary Party, or PRI, can likely count on support for the reform from the opposition National Action Party, or PAN 鈥� providing the legislative majority it needs even without help from the left-leaning Democratic Revolution Party, or PRD, which has mostly opposed structural reform. However, it appears the PRI is competing to win the public relations battle as well.

The text of the reform underscores over and over again how it remains true to the spirit of what President L谩zaro C谩rdenas was trying to do when Pemex was founded, describing numerous tenets as inherently 鈥�肠谩谤诲别苍颈蝉迟补.鈥� In linking the reform to Mr. C谩rdenas 鈥撀爓ho became a national hero for expropriating foreign oil interests 鈥撀燫amiro suggests the PRI has 鈥渋noculated鈥� itself against political attacks.

And there may be many. Opinion polls suggest a majority of Mexicans 鈥撀燼lbeit much slimmer than it once was 鈥� rejects the idea of 鈥減rivatizing鈥� Pemex or permitting foreign investment.

The question for the PRI is: 鈥淐an you thread the public opinion needle and pass a reform that modernizes the sector but isn鈥檛 seen as privatization?鈥� asks Shannon O'Neil, a senior fellow for Latin American studies at the Council on Foreign Relations.

Former PRD presidential candidate Andr茅s Manuel L贸pez Obrador 鈥撀爓ho opposes the proposed changes to the current regime 鈥撀爃as called for a march to Mexico City鈥檚 Zocalo public square on聽Sept. 8聽to protest the reform.

Curiously, back in 2008, when the PAN was trying to push through a similar reform of the energy sector, the PRI opposed it. Ramiro suggests that four years ago, 鈥渢he political risks were much higher.鈥� Not everyone knew that Mexico鈥檚 accessible reserves were running out.

Today, she says, 鈥淚 think they are much more aware of the risks of inaction.鈥�