Mexicans reject plan to give private firms bigger role in petrol industry

MEXICO: VOTERS IN a non-binding referendum have given an overwhelming No to President Felipe Calderon's proposal to give private…

MEXICO:VOTERS IN a non-binding referendum have given an overwhelming No to President Felipe Calderon's proposal to give private companies a bigger role in Mexico's government-controlled petroleum industry, despite a low voter turnout, writes Marla Dickerson.

Over 80 per cent of those who cast ballots on Sunday in Mexico city opposed the plan, according to the official tally of the federal district. The results were even more lopsided outside the capital, where nine of Mexico's 31 states also participated. With about two-thirds of the vote counted, more than 90 per cent of those voters had given the president's proposal the thumbs down.

Slightly more than 1.5 million people cast ballots on Sunday. Organisers had been hoping for a turnout twice that size in the greater Mexico city area alone.

Orchestrated by the opposition Party of the Democratic Revolution (PRD), the "Citizen Consultation" was the first of three public referendums to be held throughout Mexico to gauge public opinion on pending energy reforms.

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The results have no official bearing on legislation being hashed out in congress. But the left-leaning PRD is gambling that strong public opposition will force lawmakers to back off proposals to open some portions of Mexico's state petroleum monopoly to private or foreign companies.

Mexico city mayor Marcelo Ebrard, a PRD member and potential presidential candidate in 2012, praised the event as a way for average Mexicans to be heard on a matter vital to the nation's future.

"The will of the people that was expressed freely is clearly opposed" to the president's legislation, he said.

Critics lambasted the event as a politically motivated stunt to embarrass Mr Calderon in the middle of negotiations. Members of the president's National Action Party said that one of the two questions on the ballot was worded to elicit a No response, making the results a foregone conclusion.

The head of the state-owned oil company Pemex dismissed the significance of Sunday's results. "The turnout was limited . . . the conclusions were expected," director general Jesus Reyes Heroles said.

Mexico is the world's sixth-largest petroleum producer and the industry is the nation's largest taxpayer. But output and proven reserves are sliding badly after years of government neglect.

Pemex lacks the expertise and capital to develop Mexico's deep-water crude oil deposits. Foreign and private companies are prohibited by Mexican law from investing in the energy sector.

In February, Mr Calderon introduced legislation that would loosen some restrictions on Pemex, enabling it to team with foreign oil companies to extract the nation's undersea oil. His plan also calls for more private investment in refining and storage.

Opponents say Mr Calderon's real objective is to privatise Pemex, a charge he denies. - (LA Times-Washington Post service)