Mexico Pemex fears "crippled" oil reform

By Catherine Bremer and Alistair Bell

MEXICO CITY (Reuters) - A planned oil reform in Mexico will be "crippled" if opposition lawmakers water it down to exclude foreign partners from exploring in deep seas of the Gulf of Mexico, a top executive at monopoly Pemex said on Thursday.

Exploration and Production chief Carlos Morales said Pemex's first deep-water exploration wells had not found oil, and if foreign joint ventures are kept out of a new oil law, it could be 20 years before it produces crude from deep waters.

"They might give us more financial resources and more legal capacity, but if they don't give us the ability everybody else has to form partnerships, it will leave the process crippled," Morales told the Reuters Latin American Investment Summit.

Mexico's oil reserves are beginning to run out and Pemex lacks the technology to be able to look for more crude deeper in the Gulf.

Mexico is a top supplier of U.S. crude and oil exports provide some 40 percent of the government's fiscal income.

President Felipe Calderon hoped to pass an energy law by the end of April that would allow Pemex to pair up with experienced oil majors.

But he has hit opposition in Congress, where leftists and many centrists oppose lowering barriers to private capital.

Pemex believes there may be 30 billion barrels of unconfirmed deep-sea oil in the Gulf of Mexico but will struggle to reach it as fast as it needs to given the high risks, elevated costs and technical challenges of drilling in water several kilometers deep, Morales said.  Continued...