Mexican state oil monopoly Pemex said on Tuesday a constitutional reform proposed by President Vicente Fox to allow private companies into the gas sector could unlock huge natural gas reserves.
Pemex chief Luis Ramirez said the reform proposal - the latest in a string of energy reform initiatives that have so far all hit a wall of opposition in Congress - would not affect state ownership of Mexico's gas reserves.
He said the idea would be to have private companies extract natural gas in the northern states of Nuevo Leon, Tamaulipas and Coahuila and in the Gulf of Mexico states of Veracruz and Tabasco, to complement Pemex's own production.
"The reserves we could assign to this type of natural gas extraction would be approximately 2 trillion cubic feet," said Ramirez, adding that concessions could be similar to those awarded in Mexico's mining sector.
Despite ample reserves, a lack of investment in exploration and production of natural gas, which is less lucrative than the oil it sells abroad, means Mexico now imports 15 to 20 percent of its natural gas from the United States.
US imports are always costly, but a surge in prices in the wake of Hurricane Katrina has rattled Mexico and underlined its vulnerability to US price fluctuations.
Announcing an emergency decree on Monday to cap natural gas prices in Mexico throughout September, Fox said his energy advisers had also drawn up a draft constitutional reform to allow private companies to produce natural gas in Mexico.
Opposition parties, who dominate Congress, have already indicated they will oppose the plan, however.
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