Mexican President Vicente Fox remains adamant about adopting energy reforms, expressing concern this week about the country’s growing importation of natural gas.

Fox, who was speaking in Nayarit, Mexico, on Tuesday, has pushed for reform to begin with increased production from the country’s prolific Burgos Basin, which he said should be able to provide a lot of gas now being imported from Texas.

“For those of us who toured the area [Burgos] two or three years ago, the comparison immediately sprang to mind; why isn’t natural gas extracted here as it is in Texas?” Fox asked, according to a statement provided by Mexico’s press office. “Why does one cross the border and see well after well of natural gas extraction? What have we Mexicans got that Texans haven’t, that we can’t get our own natural gas out?”

To date, Fox’s administration has failed to gain approval of a constitutional amendment to increase private investment in the state-run power sector nor has the administration gained support for private companies to explore and produce natural gas.

The opposition party, which controls Congress, has threatened to challenge the legality of multiple service contracts (MSCs), which Petroleos Mexicanos (Pemex) began awarding last year to foreign oil and gas companies to produce gas in the Burgos (see Daily GPI, Oct. 16, 2003). Under the MSCs, Pemex hopes to double Burgos’ gas output to 2 Bcf/d by 2007.

Pemex currently produces 4.5 Bcf/d, but it still imports nearly 750 MMcf/d from Texas. Pemex uses South Texas prices as a reference for its gas price.

“We buy it from the most expensive point in the world and businessmen ask me, ‘well, why is the gas so expensive?'” Fox asked. “Why are you importing it from across the border?

“Some people say that [Texans] have started drilling their wells crooked, to get our gas from the Burgos basin. And here we are, waiting to see if Congress sees fit, one of these days, to approve an electricity reform and reforms we have presented in energy to be able to use our natural gas. Fortunately, we have decided to go ahead. If they don’t approve the proposed law and reform, then we’ll do things another way.”

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