Legislators in Mexico are today due to start debating a draft bill to open up the country's energy industry and end the decades-long monopoly of state-run Pemex, which suffers from inefficiency, falling output and chronic under-investment.
The measures would allow private oil companies to explore for, produce, and refine oil and gas, as well as share and market the resources they extract. Firms would also be able to include the projected income of long-term contracts on their balance sheets, something that is crucial for obtaining funds. However, the proposals stop short of offering firms full-blow concessions - a loaded term in Mexico.
If the bill becomes law, it could add 50-100 bps to Mexico's GDP and prompt rating agencies to give the country's debt a positive outlook, says economist Pedro Tuesta.
Congress is expected to pass the legislation this week, as it's supported by the main opposition party as well as by the government, although it faces significant public hostility.
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