Mexico Congress Approves Oil Overhaul to Break State Monopoly
Mexico Oil Producer Pemex Belongs on Stock Exchange, Bolsa CEO Tellez Says
Petroleos Mexicanos, Latin America’s largest oil producer, would benefit from following the path of Brazil’s state-controlled Petroleo Brasileiro SA and selling a stake to the public, according to Luis Tellez, chairman and chief executive officer of Bolsa Mexicana de Valores SAB.
“Pemex should move the way Petrobras has moved, with the government having still controlling shares and having a very transparent privately run company,” Tellez said today in an interview at Bloomberg’s headquarters in New York. “Within the political establishment, within Congress, within the parties, the issue of Petrobras is being discussed.”
Petrobras first sold shares to the public in December 1957 on the now extinct Rio de Janeiro stock exchange and has soared more than six-fold in the past decade. The company raised as much as $70 billion in the world’s largest share sale in September to help finance its $224 billion investment plan.
State-owned Pemex, as the company is known, had revenue of $83.4 in 2009 and provides about a third of Mexico’s public budget.
Tellez said a Pemex IPO has support even among members of Mexico’s Party of the Democratic Revolution, whose presidential candidate in the 2006 elections, Andres Manuel Lopez Obrador, worked to derail efforts to loosen the company’s monopoly on energy production in 2008. Mexico’s constitution reserves the ownership of oil and gas for the state and bans any accord that would give outsiders an equity stake in oil projects.
“The enlightened people of the PRD are saying we have to do something, and look at what President Lula did, and look at what Petrobras is doing,” Tellez said. “I think that there will be a turning point which will be the election of 2012.”
Ten companies may sell shares in the Mexican market next year, including the Mexican units of foreign-based oil-services providers, Tellez said. The nation will probably have one more IPO this year after OHL Mexico SAB, a unit of Spanish construction company Obrascon Huarte Lain SA, raised 9.7 billion pesos ($797 million) in Mexico’s biggest offering yesterday, he said.
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