Feb. 13 (Bloomberg) -- Mexican President Felipe Calderon's party probably won't send congress a bill to open the state oil industry to foreign and private investment this session because support for the plan is lacking, the speaker of the house said.

Ruth Zavaleta, a member of the opposition Party of the Democratic Revolution, said she was told by members of Calderon's party that they'll hold off on reform.

Senators from Calderon's National Action Party have said state monopoly Petroleos Mexicanos needs outside investment to halt a decline in crude production and reserves. Opponents, including former presidential candidate Andres Manuel Lopez Obrador, say that opening up the energy industry would rob Mexicans of riches guaranteed in the country's constitution.

`I don't see this proposal moving forward,'' Zavaleta said today at a breakfast in Mexico City with foreign journalists.

National Action Party Senator Ruben Camarillo, secretary of the Senate Energy Committee, said the group is still working on a bill to improve the oil industry.

``It's hard for me to say whether the bill will be presented or not, it depends on how much progress we make on the committee level,'' Camarillo said in an interview today. He said he didn't know what Zavaleta's comments were based on.

Members of the opposition Institutional Revolutionary Party, which had been working with Calderon's party on the energy bill, have withdrawn their public support after Zavaleta's party threatened protests against the reform.

Public Opinion

``The surveys are very clear: Eighty percent of the Mexican people don't want the privatization of oil and Pemex,'' Zavaleta said, without specifying which polls.

Daily crude output could drop to 2.1 million barrels by 2016 from about 3 million barrels now unless Pemex gets the money it needs to explore in waters deeper than 5,000 feet in the Gulf of Mexico, where much of Mexico's oil is located, according to a government study.

Mexico's constitution reserves oil and gas extraction for the state, barring Pemex from production-sharing agreements with foreign or private oil companies. Calderon's party members were looking at ways to allow some outside investment in the industry without modifying the constitution.

Calderon leads a minority government and needs support from the Institutional Revolutionary Party, or PRI, to pass proposals in Congress. Unless the government reaches an agreement with the PRI soon, it probably won't submit an energy bill until after congressional elections in 2009, Zavaleta said.

Petroleos Mexicanos, or Pemex, controls the Cantarell field in the Gulf of Mexico, the third-largest deposit in the world.

To contact the reporter on this story: Adriana Arai in Mexico City at aarai1@bloomberg.net; Adriana Lopez Caraveo in Mexico City at adrianalopez@bloomberg.net

Last Updated: February 13, 2008 14:32 EST