MEXICO CITY: Mexico's Senate opened a debate Tuesday on controversial legislation to break the country's oil monopoly by allowing foreign firms to drill for crude for the first time in 75 years.
The bill, which has sparked demonstrations, is the centerpiece of President Enrique Pena Nieto's sweeping reform drive, which has led to new laws in tax collection, telecommunications and education in an effort to revitalize Latin America's second biggest economy.
The latest reform would let private firms explore and extract oil and gas as well as share profits, production and risks with state-run energy giant Pemex, ending a ban cemented in the constitution.
The bill proposes a contract and licensing schemes that fall short of more controversial concessions.
The proposed constitutional changes stem from a deal between Pena Nieto's centrist Institutional Revolutionary Party (PRI) and the conservative opposition National Action Party (PAN).
The two parties say the reform is badly needed to modernize Pemez and reverse falling oil production.
"History judges events and it will have to judge this reform as a turning point for the national economy," said PRI Senator Oscar Roman Rosas Gonzalez.
But the left-wing Democratic Revolution Party (PRD) equates the plan to treason and submission to US oil companies, calling the legislation a bid to privatize a symbol of national sovereignty.
The Senate rejected a bid by the left-wing minority to suspend the debate in order to put the reform before a "popular consultation."
Opponents have held protests outside the Senate for days, accusing Pena Nieto of seeking to privatize Pemex, but the PRI insists the country's oil would remain in the nation's hands.
But leftist opponents vowed to fight what they see as a bid to privatize a symbol of national sovereignty. Protesters have camped out outside the Senates, hitting metal police barriers with shoes, sticks and rocks.
Supporters of the reform deny that the legislation would privatize the sector, insisting that the oil would remain the property of Mexico.
The Senate debate could drag on through the night and it is unclear when a vote would take place. The bill would then move to the lower chamber of deputies.
Changes to the oil sector strike at the heart of modern Mexico's national identity.
In 1938 then president Lazaro Cardenas nationalized the foreign-operated oil industry, a wildly popular move that asserted Mexico's right to its own mineral wealth.
The government also founded Pemex, which despite its many problems remains one of the country's most important sources of income from exports.
The reform is "a 180-degree turn from what Mexicans learned about the concepts of sovereignty and nationalism," said PRD Senator Zoe Robledo.
The PRI and PAN say the reform is needed to reverse a downward trend in oil production, which has dropped from 3.4 million barrels per day in 2004 to 2.5 million bpd today.
The PAN also appeared to have won its battle to remove Pemex's powerful union from the company board as the latest text of the legislation shows that it would lose its five seats.
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