Calderon Shuffles Mexico's Cabinet, Names Jose Meade as Energy Minister

Mexican President Felipe Calderon announced changes to his Cabinet, appointing a new energy minister who may be able to make more progress moving forward measures in Congress to boost oil production.

Deputy Finance Minister Jose Antonio Meade will replace Georgina Kessel as energy minister, while Dionisio Perez-Jacome, also of the Finance Ministry, will replace Communications and Transportation Minister Juan Molinar Horcasitas, Calderon told reporters yesterday. Kessel will head development bank Banobras.

Meade, 41, who was instrumental in the passage of Calderon’s 2011 budget bill, may be able to negotiate new energy legislation as energy minister, said Gabriel Casillas, JPMorgan Chase & Co’s chief economist in Mexico City.

“In addition to being a very good economist, he’s a smooth political operator,” Casillas said in a telephone interview.

Petroleos Mexicanos, the national oil company, is lobbying the government to transfer some of the company’s pension liabilities to the federal government and to cut taxes for some new oil projects.

The Senate may approve a proposal to reduce taxes for Pemex by March, opposition Sen. Francisco Labastida said in a Nov. 12 interview.

Repeated Shuffling

Calderon has repeatedly shuffled his Cabinet since taking office in December 2006. He has named four interior ministers, three economy ministers and three social development ministers.

Meade has a doctorate in economics from Yale University. He previously served as the head of financial planning for Mexico’s pension fund regulator and the head of the Finance Ministry’s banking unit.

“Good performance from the energy sector impacts the whole economy,” Meade said yesterday after Calderon’s announcement.

Perez-Jacome was named deputy finance minister in January 2008 after serving as chief advisor to the office of the president since the beginning of Calderon’s term in 2006. He holds a master’s degree in public policy from Harvard University.

Calderon didn’t say who will replace Meade and Perez-Jacome at the Finance Ministry.

Calderon appointed Kessel to the Energy Ministry post when he took office in 2006. She was previously the head of the Mexican mint.

Kessel, who as the energy minister was also the chairwoman of Petroleos Mexicanos, helped Calderon secure approval of the biggest energy law changes in almost two decades to allow Pemex to pay foreign and private companies performance-based cash incentives to explore for oil.

Performance-based Contracts

The board of Pemex, as the Mexico City-based company is known, took almost two years before giving its approval on Nov. 24 to the performance-based contracts for oil production and exploration.

The contracts were challenged by the company board and their legality was disputed by some lawmakers in the Supreme Court. The court upheld company bylaws allowing the contracts last month.

Mexico plans to hire private companies to maximize reserves in older fields and also explore in deep waters in the Gulf of Mexico, where it estimates it may have 30 billion barrels of oil. Pemex is targeting companies such as Exxon Mobil Corp., Royal Dutch Shell Plc and BP Plc.

Kessel also oversaw the shutdown of Luz y Fuerza del Centro, the state-owned electricity company for Mexico City and surrounding areas, citing its inefficiency.

Kessel “was a minister that got involved more in Pemex than some of her predecessors,” Hector Moreira, Pemex board member and a former deputy energy minister, said yesterday in a telephone interview.

Kessel will replace Alonso Garcia Tames as chief executive officer of Banobras.

Molinar, 55, was named to lead the Communications and Transportation Ministry in March 2009, replacing Luis Tellez.

He presided over the country’s first auction of mobile- phone airwaves in five years and an auction to lease fiber-optic lines owned by the Comision Federal de Electricidad to telecommunications carriers.

Infrastructure Projects

During his tenure, the ministry struggled to go forward with bids for work on infrastructure projects such as an airport in Mexico’s Riviera Maya resort area, which has met with repeated delays.

Opposition parties such as the Institutional Revolutionary Party, or PRI, have criticized Molinar Horcasitas, saying his office has been unable to efficiently channel resources into new infrastructure projects.

“It seems inadmissible that fundamental public works for the nation’s development go unfinished because authorities don’t use their resources quickly and efficiently,” PRI Senator Adolfo Toledo Infanzon said in a Dec. 21 statement. He said a highway in the southern state of Guerrero was behind schedule.

Perez-Jacome might perform better in the post, Casillas said, because “he knows very well how the country’s revenues are handled and he can direct them to infrastructure projects, especially highways.”

Perez-Jacome will be the third communications and transportation minister under Calderon, following Molinar and Tellez, who now leads the Mexican stock exchange operator, Bolsa Mexicana de Valores SAB.

Calderon also named former lawmaker Roberto Gil as his new private secretary, replacing Luis Felipe Bravo Mena.

Mexicans are pessimistic about the economy, according to a study by Mexican polling firm Consulta Mitofsky.

In December, 76.1 percent of those polled said they expect the economic situation to worsen next year, up from 73.6 percent the previous month.

Roy Campos, head of Mitofsky, said in a phone interview that 2010 had been Calderon’s most difficult year in terms of public perception.

To contact the reporter on this story: Jens Erik Gould in Mexico City at jgould9@bloomberg.net Carlos Manuel Rodriguez in Mexico City at carlosmr@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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