MEXICO CITY (AP) — Mexico's Senate has approved the most dramatic oil reform in decades, moving the country closer to opening its beleaguered, state-run sector to private companies and investment.
The Senate voted overwhelmingly in favor of allowing the government to grant contracts and licenses for exploration and extraction of oil and gas to multinational firms, something currently prohibited under Mexico's constitution.
Contracts could be made directly with the state, rather than issued by the state-run oil company, Petroleos Mexicanos, ending its monopoly on Mexican oil. The reform allows contracts for profit- and production-sharing, as well as licenses, in which companies pay royalties and taxes to the Mexican government for the right to explore and drill.
The reform is expected to be approved by the lower house and state governments in coming weeks.