Pemex to form company to explore for oil in USAugust 19, 2013 @ 3:01 pm
MEXICO CITY (AP) - Mexico's state-owned oil company says it will form a new entity to explore and produce shale gas and deep-water oil in U.S. territory.
The plan will help Petroleos Mexicanos, known as Pemex, acquire drilling techniques it now lacks for complicated terrain in Mexico, chief executive Emilio Lozoya said in an interview with the Wall Street Journal.
Pemex confirmed the plan Monday.
"The geology is similar and we can benefit from numerous areas of collaboration with international oil companies," Lozoya said.
Pemex has so far been unable to exploit its shale and deep-water reserves, and the Mexican constitution limits its ability to hire outside expertise in Mexico. The government has proposed allowing Pemex to enter profit-sharing contracts with private companies and let outside companies refine and transport oil inside the country.
That would require politically controversial changes to the constitution, which states that Mexico's oil belongs to the state.
Mexico's largest leftist party is leading opposition to opening up Pemex to more private investment as a way to reverse its declining production.
On Monday, the Democratic Revolution Party, or PRD, presented its own plan to fix the ailing, outdated oil company without constitutional changes or a greater role for private companies.
Instead, the PRD is proposing to loosen the government's stranglehold over revenues from Pemex, where 70 percent of profits go to fund the federal budget.
Party founder and former presidential candidate Cuauhtemoc Cardenas also said Pemex should be made more indepedent by removing Cabinet secretaries and the oil workers union from the Pemex board seats they now hold.
Cardenas is the son of the late President Lazaro Cardenas, who nationalized the oil industry in 1938.
Mexico's oil production has dropped by about one-quarter over the last decade.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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