The Mexican government on Wednesday unveiled its proposed rules for a historic opening of the state-owned oil and energy industry, saying contracts and production licenses should be put out for public bid and go to the company that offers the best return.
Petroleos Mexicanos, known as “Pemex”, profited nearly 70 billion dollars in 2012. But because of the way Mexico’s energy policy was written, it paid almost all of that money back to the Mexican government, leaving it no room to invest in infrastructure and little resources to buy new technologies for exploration.
All the while, a cloud of corruption hangs over the company. The men running it and their government counterparts are wealthy beyond compare, while the men working the oil platforms are forced to stay in five dollar per night motel rooms on bunk beds.
Last year, Mexican President Enrique Pena Nieto successfully marshaled legislation through the country’s two houses of Congress that changes the entire structure. It opens up the country’s energy sector to foreign investment. And the tax structure for Pemex is also slated to change. But while that law was passed, the regulations and rules to actually make it happen, are still a work in progress. It’s an effort that’s being debated this week in Congress. The results could become models for countries like Brazil and China. CCTV’s Franc Contreras has Insight into how it’s all shaping up.