The Mexico City daily REFORMA on October 24 published an article that had been submitted by George Baker on two aspects of energy reform. The principal arguments are these:
1. The government’s intent in proposing to modify Article 27 is to restrict its scope to petroleum in-situ, thus placing the responsibility in the hands of the Congress and the Executive to devise the most appropriate manner of its exploitation. Both the PAN and the PRI, without saying so directly, regard the restrictions in Article 6 of the Petroleum Law of 1958 as unconstitutional.
Once Article 27 has been cleaned up, removing the extraneous matter inserted in the amendments of 1960, it will be clear that petroleum-in situ belongs to the Nation; and it will be the responsibility of the Congress and the Executive to devise the appropriate oil regime that responds to changing technology and market conditions.
2. For a new Oil Regime to prosper, the government must create a Pemex 2.0 as a state-majority, mixed capital enterprise that issues common stock. Otherwise, any expectation that IOCs will welcome Pemex as an equity partner in Mexico or beyond will not be fulfilled.
The website of REFORMA requires a subscription; but public-access extracts have been posted on the web portal eleccionesmexico.org (link below).
