Jan. 9 (Bloomberg) -- Petroleos Mexicanos, the nation's state oil monopoly, can boost slumping crude output through internal reorganization and thus avoid intrusion from private or foreign investors, the main opposition party said.

Pemex, Latin America's largest oil producer, would consolidate its four subsidiaries into a single company and be given power to manage its own budgets under a proposal by the Party of the Democratic Revolution, said Senator Graco Ramirez Garrido, a member of the Senate Energy Committee.

The opposition's proposal goes against President Felipe Calderon's plan to open refineries, oil pipelines and transportation to private and foreign investment, freeing up cash for Pemex to invest in exploration and drilling.

``The discrepancy we have with them is opening parts of the company to private investment,'' Ramirez said today in a telephone interview. ``The government, not Pemex, has retarded the company's growth.''

Ramirez's party also wants independent directors on the state-owned company's board. Currently the board is composed of cabinet ministers and representatives of Pemex's labor union.

`Robbed'

Mexicans would be ``robbed'' of their right to the riches of Mexico's oil should the government privatize Pemex, former presidential candidate Andres Manuel Lopez Obrador said at a Mexico City rally today. Lopez Obrador called on thousands of supporters to stage demonstrations in February and March.

``We will not allow for any reform that puts petroleum in the hands of foreigners,'' said Lopez Obrador, who organized two months of demonstrations in 2006 after losing the presidential election to Calderon. ``We will not allow Mexicans to be robbed of their right to the riches of Mexico's petroleum.''

The Senate Energy Committee may have a draft bill to change Pemex laws ready in February. Senators will meet with Deputy Finance Minister Ernesto Cordero Jan. 15 to discuss Pemex's finances, Ramirez said. Committee members will meet again next month to discuss how private and foreign companies may be allowed to invest in parts of the Mexican oil industry, said Sen. Ruben Camarillo of Calderon's party in an interview today.

Calderon's party is counting on support from the Institutional Revolutionary party to pass the Pemex bill, said David Maldonado, head of the Energy Committee in the lower house.

``Pemex will be a state company that will have alliances with private companies, Mexican or foreign. That's where the PAN and the PRI agree,'' Maldonado said in an interview today, referring to his party and the Institutional Revolutionary Party.

Crude output could drop to 2.1 million barrels by 2016 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 crude is located, according to the government.

-- Editors: Adriana Arai, Brendan Walsh

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

Last Updated: January 9, 2008 21:03 EST