Results from the first phase of unofficial referendums on oil privatization are in. More than 83% of citizens of Mexico City said no to the questions: “With the whole cycle of oil production under state auspices, do you agree that the private sector should play a role?” and “In general, are you in agreement with the proposed energy reforms in Congress?”
This is the first of three referendums, with the other two taking place on August 10th and 24th. Although they do not carry legal weight, the first “no” will pose a serious annoyance to the Calderon administration's proposed reforms to keep Pemex in the black. Since 2005, “daily [Pemex oil] production has dropped more than 300,000 barrels per day, or some 10% of the total” (see Economist article here).
That said, Mexico's economic policy is a paradox. The country that has the world's most free trade agreements (see post here) is also the same place that appears to vehemently oppose private sector participation to keep Pemex afloat, despite heavy losses in spite of all-time highs for oil prices.
