Mexico Lower House Passes Last Oil Bill, Sends to Senate
Mexico’s Lower House passed a final package of bills early today to regulate an end to the nation’s state oil monopoly, sending the legislation to the Senate for final approval after making minor changes on pension and retirement issues.
Lawmakers modified the bill to make the age when workers at state-owned Petroleos Mexicanos can retire rise gradually to the same as for other federal employees. They also decided the company needs to have its pension funds audited, which, like the age requirement, is contingent on the government assuming some Pemex debt.
Earlier this week, Lower House committees approved legislation to give Pemex and state utility Comision Federal de Electricidad the chance to transfer some of their pension liabilities to the government if they modified labor agreements.
The changes could free up capital for other projects at Pemex, Chief Financial Officer Mario Beauregard said July 25. The company’s pension liabilities totaled 1.13 trillion pesos ($85.7 billion) as of March 31.
“The Federation’s Superior Auditors will carry out a specific audit concerning Pemex’s pension liabilities and those of its subsidiaries in order to identify the characteristics of the payment obligations” the bill states.
President Enrique Pena Nieto broke the state’s 75-year monopoly on oil drilling in December to attract producers such as Exxon Mobil Corp. (XOM) and Chevron Corp. to develop some of the largest unexplored oil fields outside the Arctic Circle. The overhaul could generate $20 billion in additional foreign investment each year as soon as 2015, according to Bank of America Corp.
The Lower House bills, which stipulate rules for Pemex debt, as well as taxes and royalties paid by companies for oil production, will be debated in the Senate as soon as Aug. 4. Also next week, the Senate will discuss bills governing contracts for oil producers after the Lower House made changes to the legislation already passed by the Senate last month.
If the Senate approves the bills with no changes, they’ll be sent to Pena Nieto to be signed and published. Otherwise, they’ll return to the House for a final vote.
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