Mexico’s upper house of Congress approved the following amendments to laws governing the country’s oil sector on Thursday, October 23, 2008, according to a Financial Times report:

  • Four independent members added to Pemex’s 11-person board of directors;
  • Pemex may hire private sector oil/gas exploration and production companies; and
  • Pemex may pay oil/gas production bonuses to private sector companies (i.e., incentivized services agreements).

Regretably, the amendments do not permit private sector involvement in the building or ownership of refineries or in areas of oil transportation nor do they permit Pemex to enter into oil/gas production-sharing contracts with private sector.

Although the addition of independent directors to Pemex’s board and the allowance of payment of production bonuses to private sector companies is a positive development, the reforms fall well short of what was hoped for by the Calderon administration and foreign investors.