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Paraiso, Mexico: Mexico's proved oil reserves fell for the sixth straight year in 2007, state energy monopoly Pemex said on Tuesday, putting pressure on the government to shore up a flagging industry that supplies a large chunk of US crude oil.
Mexican President Felipe Calderon said the figures showed the need for an 'objective' debate on oil reform.
Legislators from Cald-eron's conservative party have pushed for legal changes that would let Pemex use private partners to expedite deepwater oil exploration projects, but the proposal has drawn fierce opposition.
Mexico's end-2007 prov-ed oil and gas reserves dropped to 14.7 billion barrels of crude equivalent from 15.5 billion a year earlier, Pemex director General Jesus Reyes Heroles said at a ceremony to mark the 70th anniversary of Mexico's 1938 oil industry expropriation.
Mexico's proved oil and gas reserves stood at 30.8 billion barrels at the end of 2001, but have dropped every year since then, data on Pemex's website shows. Exploration spending had stagnated under years of one-party rule up until 2000.
Pemex's proved reserves replacement ratio increased to 50.3 per cent at the end of 2007 from 41 per cent a year earlier. But that means Pemex still is only discovering one barrel of new oil reserves for every two it extracts.
"It's a situation it is imperative to change. It's time for action," Calderon said, after drawing cheers from assembled oil workers by promising not to privatise Pemex. "The question we should be asking is how are we going to make the most of our oil resources. I am appealing to all Mexicans for us to have an open, objective and serene dialogue on the options for streng-thening, really strengthening, our oil industry," Calderon said.
Pemex's exploration efforts have been hampered by its huge tax bill, as Mexico used oil as its main cash cow. Two successive conservative governments have hiked Pemex's investment budget since 2000 and cut its taxes.
But the idea of allowing private partnerships has stirred passions in a country where polls show half the population opposes lowering barriers to private investment in oil.
Opposition
The left-wing opposition has vowed to fight the proposal in Congress and on the street, and Calderon is not yet sure he can count on full support from the centrist party that makes up the third bloc in the legislature.
Heroles said not allowing Pemex to work with other companies would make it especially costly to explore for oil under the Gulf seabed in waters several kilometres deep.
Initial seismic tests suggest Mexico could have as much as 29 billion barrels of oil in unconfirmed deepwater deposits.
Bone of contention: More autonomous Pemex
Tuesday's ceremony came as the Senate energy committee is battling to put together a energy reform bill in time to get it voted on before the congressional session ends on April 30.
All parties agree a reform should give Pemex more autonomy and flexibility, but in what would be his most ambitious reform to date Calderon wants it to also allow joint ventures in the oil sector, now off-limits to any company other than Pemex.
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