Mexico outgoing president calls for oil reform

VLADIVOSTOK: Mexico, the world's seventh-largest oil producer, needs to change its oil exploration laws to boost output by allowing foreign oil firms greater access, outgoing President Felipe Calderon said on Saturday.

Mexico's oil industry is dominated by state monopoly Pemex and private companies have limited access to the market. The country faces a key test as production has fallen sharply in recent years and Pemex risks becoming a net importer of crude within a decade.

Calderon, who will hand over power to President-elect Pena Nieto at the end of the year, called on the new administration to reform and modernise the industry. Nieto has promised "bold steps" to boost outside involvement in oil exploration.

"I hope that the new government will have not only the political will but also political support ... to make such an important change in our law and in our constitution," Calderon told a briefing at an Asia-Pacific Economic Cooperation (APEC) summit in the Russian city of Vladivostok.

Pemex, created in 1938 when the country's oil industry was nationalised, made a new light crude oil find in the Gulf of Mexico in August, which, if confirmed, could provide between 4,000 and 10,000 barrels per day. Mexico's oil output is currently 2.5 million barrels per day.

"Is that enough for the country? I don't think so," said Calderon. "I still believe that Mexico requires an important reform in order to allow Pemex to modernise its processes, to modernise its technology, to modernise its know-how, getting the experience of global companies."

To discover new fields and increase output, Mexico should consider allowing Pemex to create joint ventures with foreign companies, acquiring technology and know-how from companies like Norway's Statoil and Brazilian Petrobras, Calderon said.

Calderon's presidential stint ends in December and Nieto, who has pledged a raft of fiscal, labor and energy reforms, will be sworn in on Dec. 1.

"I hope that the new government will be very rational," Calderon said, adding that the budget deficit of 0.4 percent of gross domestic product is set to be brought to zero in the next few years.