Citizen Referendum, Concern About Deepwater Oil Reserves Could Influence Pemex-reform Legislation

The Mexican Congress will consider two very important and potentially conflicting factors when taking up legislation to reform the state-run oil company PEMEX during the fall legislative session, which begins in September. First, legislators will have to take into account a nonbinding citizen referendum. Although participation was fairly low, those who cast a ballot rejected any private participation in PEMEX. A second factor is the efecto popote (drinking-straw effect) by which Mexico could lose potential deepwater reserves in the Gulf of Mexico to multinational oil companies if it does not act to access those reserves. However, the only way to access the reserves is with technology and expertise provided by foreign companies. Referendum voters reject privatization, but participation very low Reaction to the first phase of the citizen referendum, sponsored by the center-left coalition Frente Amplio Progresista (FAP), was mixed. The vote was held in Mexico City and nine other states, with votes elsewhere in the country to follow during August