Corruption concerns cloud Pemex reform plan

Mexico President Enrique Peña Nieto wants to open the state oil company to private and foreign investment.

But potential partners subject to the FCPA night be reluctant to join with Pemex because of corruption red flags.

A story in Oil Patch Asia said about 80 percent of Mexicans now associate Pemex with corruption. Most believe Peña Nieto’s plans won’t do much beyond creating more rich elites.

Pemex workers already complain about unsafe conditions and low wages at the state-run monopoly, the story said.

Foreign companies have been banned from Mexico’s oil industry since nationalization in 1938.

President Peña Nieto thinks international partners should start sharing in the risks and rewards.

Mexico’s oil production has fallen from 3.5 million barrels a day in 2004 to about 2.5 million barrels now, Oil Patch Asia said. Almost a third of the country’s budget comes from oil revenues.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.