Pemex will not be privatised

Mexican President Vicente Fox said that the country's state-run oil giant, Pemex, will not be privatised and will continue to be "proudly Mexican."
"It is historically and rightfully ours. Only the residents of this great country can decide its use, exploitation and fate," Fox said at opening ceremonies for the natural gas processing complex in Burgos, in the northern state of Tamaulipas. "Today, 66 years after its expropriation, oil is and will continue to be one of the fundamental riches of the Mexican people," the president added.

Fox was referring to the announcement of the nationalization of the oil industry by President Lazaro Cardenas on March 18, 1938.
"I reaffirm that Pemex will not be dismantled, privatised or auctioned off. It will continue to be a proudly Mexican company," said Fox, who maintains that the state-run company is a launching pad for development.

The Mexican government promoted electrical reforms last year that were rejected because many felt that would be the first step in privatising the energy sector. Fox said police operations at the company's facilities designed to prevent fuel theft would continue.
Pemex recorded losses of some 16 bn pesos ($ 1.45 bn) each year between 1998 and 2002 due to fuel theft, but this figure was reduced to 12 bn pesos ($ 1.09 bn) last year. During his visit to the gas processing facility, Fox said he foresaw narrowing the gap between growing demands and the production of gas in Mexico.

The three private consortia that won the initial round of bidding for gas production in the Burgos Basin of Tamaulipas state began work in January on the infrastructure for gas wells in cooperation with Pemex. Gas exploitation will be accomplished through a system of multiple service contracts. This is a legal mechanism that allows private companies to participate in the construction of natural gas production plants for a maximum of 19 years, although the product that is extracted and the infrastructure belong to Pemex.
Pemex estimates that through this system companies will invest $ 10 bn over the next 20 years in 4,000 wells in the Burgos Basin, saving the government $ 2 bn and generating thousands of jobs.