Pena Has Strength to Open Mexico's Oil Industry Nacha Cattan - Bloomberg News
go to original October 30, 2012

Mexico’s President-elect Enrique Pena Nieto has the leadership to bring together members of his party and the opposition to pass laws opening up the oil industry to private investment, his top economic adviser said.

Pena Nieto has “the conviction for the reforms, the political experience and the leadership of his party,” to push through the changes, Luis Videgaray, co-head of the incoming president’s transition team, said in an Oct. 26 interview. “It implies building a political consensus. It’s what we’ll do with energy.”

The toughest resistance may come from within Pena Nieto’s Institutional Revolutionary Party, or PRI, a traditional ally of unions that have opposed past energy overhauls, said Lisa Schineller of Standard & Poor’s. Already, labor legislation presented by outgoing President Felipe Calderon and initially backed by Pena Nieto to ease the hiring and firing of workers is facing delays in Congress as PRI lawmakers refuse to approve some clauses to boost union transparency.

Pena Nieto is returning the PRI to power after a 12-year hiatus from more than seven decades of uninterrupted rule.

“Luis Videgaray represents this very reform-minded wing, but the PRI is diverse,” Schineller, a sovereign ratings director at S&P, said in a telephone interview from New York. “It’s different when the PRI was in power pre-2000. The power base at the local level is now greater. When it comes down to actual negotiations, it may be harder than expected.”

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