Home | Columns | Media Watch | Reports | Links | About Us | Contact

mexidata_logo.jpg

Special 040908 Energy Bill

April 9, 2008

Speech by President Felipe Calderón on Submitting Mexico’s Energy Bill to the Senate

For Links to Submission Documents (in Spanish): See Endnotes

Today, it is up to all Mexicans to act with true patriotism, to make better use of our resources for the benefit of all Mexicans.

Mexican men and women, good evening.

I am addressing you at a key point in the history of our nation.

Today, exercising the powers vested in me by the Constitution, I submitted a reform proposal to Congress to make the best use of the potential of our petroleum industry and strengthen Petróleos Mexicanos.

Seventy years ago, General Lázaro Cárdenas' vision gave Mexico a future.

Today, it is up to all Mexicans to act with true patriotism, to make better use of our resources for the benefit of all Mexicans.

Mexico requires lofty goals and a vision of the future.

First of all, I would like to make it quite clear that petroleum is and will continue to belong exclusively to Mexicans. PEMEX will not be privatized. Petroleum is an emblem of national sovereignty and has been vital to the development of Mexico.

The initiative does not seek to privatize but rather to strengthen Petróleos Mexicanos.

Mexico is losing ground vis-ŕ-vis international competition. PEMEX has dropped to 11th position after being one of the world's leading oil companies.

The causes are not only financial but mainly technological and operative. As a result, the country’s oil reserves are declining.

At current production rates, we have proven reserves for just over nine years of production. Production has fallen and we now extract 300,000 fewer barrels than 3 years ago.

This means that we have stopped receiving approximately $100 billion pesos annually, with which we could have quadrupled the Oportunidades Program budget, which supports the country’s poorest families.

Despite being an oil-rich country, four out of every ten liters of the gasoline we use in our cars comes from other countries, since PEMEX lacks the necessary capacity to refine petroleum.

The good news is that it is possible to increase the capacity to find new oil reserves, that it is possible to boost Petróleos Mexicanos’ production capacity for the country's benefit.

Fortunately, we have the capacity and the potential to adjust our course. We have workers who have provided proof of their capacity, responsibility and patriotism.

We have major inland seams and near the coasts but it is estimated that over half our potential reserves are in the deep waters of the Gulf of Mexico. We should take advantage of that wealth.

That is why the aim of the reform is for Mexico to have oil, not only for the next few years, but for future generations of Mexicans and for oil wealth to produce more well-being for all.

The initiative I sent Congress seeks to strengthen PEMEX by guaranteeing its status as a public firm at all times and guaranteeing Mexicans' exclusive ownership of oil and the company's control of exploration, drilling, exploitation and petrochemicals.

The initiative does not seek to modify the Constitution. It will guarantee that the company continues to belong to all Mexicans.

The principles proposed for reinforcing Petróleos Mexicanos are as follows:

First. I propose to give Petróleos Mexicanos the financial and managerial autonomy it requires to cope with new challenges as well as possible.

In particular, we wish to give PEMEX greater freedom as regards the handling of its budget and debt, so that it can re-invest any surplus in improving the firm. This will enable more resources to be allocated to new petroleum and gas exploration and production projects.

Second, and in conjunction with the above, the aim is to create a new administrative structure for Petróleos Mexicanos and give the firm greater powers of decision, administration and hiring so that it can have access to state-of-the-art technology and increase its capacity to implement projects.

In particular, the aim is to establish a special system for hiring, acquisitions and public works that is different from the rest of the government, which would allow the firm to be much more efficient.

Third. In order not to have to import gasoline, diesel and other products from abroad, as we do now, in other words, in order to reduce our dependence on foreign countries for refined petroleum products and to reinforce our energy sovereignty, the aim is to allow PEMEX to contract firms specializing in the construction and running of new refineries for Petróleos Mexicanos.

This will permit the creation of far more jobs, trigger regional development in places where new refineries are built, produce cleaner, environmentally friendly gasoline that will protect our families' health and totally eliminate Imports, in addition to reinforcing the national petrochemical industry.

This will enable much cheaper fertilizer to be produced in the country for people in the countryside.

I should point out that during this process, PEMEX will continue to own the country's oil and all the by-products obtained from it.

Fourth. I propose to improve the administration of PEMEX to bring it into line with the world's best companies, guarantee the firm's absolute accountability so that it will tell all Mexicans how and what it spends its money on. That is why we will provide it with better tools to combat corruption.

Fifth. In order to consolidate PEMEX as a firm belonging to all Mexicans and for us to be successfully part of the firm, the aim is to create citizens' bonds, in other words, credit bonds that will be available to all Mexicans.

For the first time ever, Mexicans will not only be the owners of petrol but also directly benefit from the firm's profits.

According to this proposal, any Mexican citizen and only Mexican citizens will be able to purchase citizens' that will pay a yield that is not only sufficient to preserve its value but also to obtain similar yields to those PEMEX obtains from its operations; every citizens' bond will be able to have a value of 100 pesos and be broadly distributed throughout the population.

At the same time, I am establishing strict limits that will prevent those bonds from being concentrated in the hands of a few.

The citizens who acquire these bonds will receive all the information on PEMEX’s performance. It should be pointed out that they are not shares, meaning that the firm's ownership will not be at risk.

Sixth. I also propose to strengthen the authorities regulating the energy sector, in order to guarantee that the benefits of oil will be for all Mexicans.

Lastly, the initiative contains a series of measures to ensure that at the same time that more is produced and the reserves are replaced for the following generations, PEMEX confirms its commitment to the care of the environment.

We are working today for the Mexico of tomorrow.

Mexican men and women:

The Mexican Government does not only have a party or group vision. The government, and I understand this as an obligation, records society's worries and concerns.

The solution to the country’s major problems must occur within respectful debate and involve the calm, objective analysis of what is best for Mexico.

The situation of Petróleos Mexicanos has been the subject of a broad discussion in recent weeks and months.

This initiative reflects the main concerns expressed by society in this deliberation. I am convinced that the issue must be broadly discussed and enriched by all the political forces represented in Congress.

We must act now, because time and petroleum are running out.

Whereas other countries have already exploited their deep-water petroleum, in Mexico, we have not been able to start.

While our neighbors Cuba and the United State are already beginning to drill for petroleum in oil fields they share with Mexico on the border, in Mexico we continue discussing the issue of whether PEMEX should be given powers to explore and make better use of our petroleum which is buried at the bottom of the sea.

The petroleum is ours and we are going to go after it.

We all have to invest now to get that wealth.

The people and government of Mexico are convinced that petroleum should continue to be owned by all Mexicans, which is what will happen.

PEMEX will not be privatized, that is not under debate.

This initiative will strengthen PEMEX. What is at stake is how we will cope with the historic responsibility of putting Petróleos Mexicanos on the road to becoming, once again, one of the world’s most important oil companies in the 21st century.

Let us be the generation that was able to overcome differences and find a route.

We can make better use of our oil wealth.

We can expand our resources.

We can produce more petroleum and have more income for Mexicans.

We can have the technology, knowledge and capacity to implement that will enable us to make better use of our national wealth.
 
Mexico will be able to recover its position as a world oil power.

Strengthening PEMEX means strengthening Mexico. A strong PEMEX is the best way to defend national sovereignty.

If Congress approves the reform, we will be in a condition to guarantee a better future for our children.

If we manage to obtain the resources the reform will give us, the state could fully guarantee access to quality education and full health coverage for all Mexicans.

It is possible to strengthen PEMEX and have the resources we need to live better: more schools, medicines, clinics, hospitals, roads, highways, bridges, safe drinking water, drainage, electricity and housing.

With the reform, for example, we will have the necessary resources to create high schools and universities so that no young Mexican will be deprived of the opportunity to study a technical or professional degree course.

There are many young people who do not have a place at high school or university, which is a problem we must fix.

Oil can continue to be a trigger for prosperity that will enable us to overcome poverty and guarantee education and health for all Mexicans.

My government is determined to act today, bearing in mind the generations of the present but above all, the Mexicans of tomorrow.

I repeat, oil is and will continue to belong to everyone.

Let us take advantage of this wealth to leave our children a stronger, fairer nation, A more prosperous, fully developed Mexico, which I know we can do; I know that with everyone’s help we will be able to achieve this.

Thank you

——————————

The legislative proposal submitted to the Mexican Senate, in five documents (in Spanish), can be accessed via the following links:

http://www.presidencia.gob.mx/documentos/Documento1.pdf

http://www.presidencia.gob.mx/documentos/Documento2.pdf

http://www.presidencia.gob.mx/documentos/Documento3.pdf

http://www.presidencia.gob.mx/documentos/Documento4.pdf

http://www.presidencia.gob.mx/documentos/Documento5.pdf

——————————

(Televised speech: as prepared; Presidency of the Republic, April 9, 2008, Mexico City)

Translation Presidency of the Republic