Mexico: uncertainty on reform of Pemex

President Ernesto Peña Nieto of Mexico is opposed to privatization of the state oil monopoly, Pemex. So too is the pro-business opposition party, the PAN, along with the moderate-left PRD, and the farther-left Morena group.

No problem then, except no one has yet defined what non-privatization might mean, when it comes to Pemex.

Peña's party, the PRI, has long supported the concept of a 100 percent state monopoly over exploration and exploitation of oil and natural gas.

But Peña now appears to favor a model similar to those of the Brazilian and Colombian state companies, Petrobras and Ecopetrol, which in both cases involve majority state ownership with a minority participation of private shareholders.

Without additional capital, and a board of directors with fresh ideas, Pemex would likely little different from what it is now - a company with chronically declining production, and no overseas ventures to boost income.

So "no privatization" as Peña defines it, could mean Pemex floating a part of its equity in the stock market.

The PAN would also almost certainly approve such a formula.

But Mexico's left parties, which remain strong, might well insist on Pemex staying a 100-percent state monopoly.

The issue is complicated further by the fact that any change to Pemex's ownership structure would require the approval of two thirds of the Congress.