PRI Open to Oil Production Sharing in Energy Bill, Senator Says
Mexico’s ruling Institutional Revolutionary Party is willing to expand the congressional energy bill and allow risk-sharing contracts with payment in oil production and not only cash as originally proposed by President Enrique Pena Nieto, PRI Senator Francisco Yunes said.
“Risk-sharing contracts are on the table,” said Yunes, who also heads the senate’s finance committee, in a Mexico City interview. “There is support and consensus for risk-sharing contracts to a certain point.”
Pena Nieto’s original energy bill presented to congress Aug. 12 proposed profit-sharing contracts to private companies and fell short of further reaching legislative changes hoped for by the opposition National Action Party, or PAN. The model proposed by the PAN would grant concessions to private companies and offer broader operational control of oil.
PRI and PAN lawmakers reached a preliminary agreement last week to support a measure that would allow the state to decide the type of contracts to be offered for each project, including service contracts, profit and production sharing and licenses, according to three people who asked not to be identified as talks are private. Pena Nieto’s energy bill in congress seeks to end Petroleos Mexicanos 75-year state monopoly on pumping crude to attract investment from companies like Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX)
Lawmakers from the PRI and PAN are continuing to debate concessions as well as licenses that would allow for the exploration and production of certain hydrocarbons, such as shale gas, according to PAN Senator Roberto Gil.
“The central element of the party consensus is to provide investor certainty, particularly in the area of gas,” Gil said. “We are still discussing the idea of introducing licenses that assure the rights of the country but that also allow the private company to invest and assume the risk.”
The energy bill in congress is likely to pass this year, Gil said. Senator Armando Rios of the Democratic Revolution Party, which has opposed constitutional amendments to energy policy, said the party is seeking to delay the vote on the bill until next year.
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