BBVA Says Mexico Growth Could Rise 0.5% on Energy Bill

Increase in growth would be permanent and estimate is conservative, BBVA Bancomer says in e-mailed report. * Report says possibility “high” reform will pass congress * The reform is “without a doubt, a significant advance” from current energy policy in Mexico * Opting for profit-sharing contracts over concessions “not necessarily a disadvantage” * High costs for producing oil that’s difficult to extract could be a “serious obstacle” to reaching govt. goal of boosting crude output to 3.0m bpd in 2018 and 3.5m bpd in 2025 * Analysts Carlos Serrano, David Aylett, Arnoldo Lopez, Arnulfo Rodriguez comment in research note

• NOTE: Pena Nieto presented energy bill Aug. 12 to offer profit-sharing contracts • NOTE: State-controlled Pemex has monopoly on oil production, exploration, refining in Mexico since 1938 • NOTE: Mexico oil output headed for 9th consecutive annual decline • NOTE: Opposition PAN presented its own energy bill on July 31 which could allow sale of shares in Pemex

To contact the reporter on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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