On today’s legal deadline, the Chamber of Deputies appears set to approve the expenditure law for 2011. The Finance Commission unanimously approved the expenditure proposal at 2am. The President’s request for increases for the security agencies, including the funds to create the unified police forces, were approved. The principal cause of delay in approving the expenditure package had been negotiations to allocate funds for highway construction between the different states. (Excelsior 11/15)
More than two years after the passage of the energy reform, one of its critical elements — the so-called incentivated or integrated service contracts for oil exploration by private sector contractors– appears almost ready. The Pemex board agreed yesterday to hold a special board meeting on the 16th to consider and give final approval to the new contractual mechanism. These contracts are viewed by the Government as critical for enlisting the support of third-party contractors for exploration and development of oil and gas fields, while respecting the constitutional prohibitions on risk contracts and production sharing agreements. The incentivated contracts provide for two kinds of payments: one based on reimbursement of costs and the second based on the amount of petroleum discovered. This latter provision is being challenged as unconstitutional by the Chamber of Deputies and the matter is with the Supreme Court.
If the board endorses the contracts, the official in charge of the new contracts Sergio Guaso said Pemex expects to start awarding contracts based on the new mechanism in 3Q11.
Pemex plans to hold four bidding rounds using the new contracts. The first will be to reactivate the mature Magallanes, Carrizo and Santuario fields in the southern region; the second for mature fields in the north; the third in the Chicontepec region; and finally, in the deep waters of the Gulf.
(Excelsior 11/11, Pemex 11/10)
In an interview, Carlos Morales Gil, the head of production and exploration for Pemex, acknowledged that the state oil company has had to shut in gas production of 150,000 cubic feet/day in the Burgos basin south of the Texas border because of the inability to ensure the security of some of the gas wells. (At US$3.50 per cu.ft., the lost production is the equivalent of US$525,000 per day.) Morales said there had been no news of the six Pemex employees who were kidnapped on May 23d. “We’ve increased security, together with the Ministry of Defense, in the installations in the northeastern zone of the country, which has allowed us to partially recover the production that was reduced. However, there are zones where it is not safe to go, because of the crime threats to our people,” he said. (Reforma 11/10)
In a rare use of his veto power, President Felipe Calderón vetoed a change in corporate law that would have allowed for single shareholder corporate entitities. The President vetoed the measure not because he opposed the substance, but because the legislation that emerged from Congress created a new category of entity, with special rules, rather than just eliminating the requirement for more than one shareholder. “The Federal Executive power under my command has stated that it is in favor of a minimal regulation that gives agility to the mechanisms for setting up and operating companies; the legislation does not do this,” he said in his veto statement. The measure was originally submitted to Congress in March 2008 by the PAN and PRI and was quickly passed by the Senate, but has languished and been modified in the Chamber of Deputies. Congress can change the draft law based on the President’s observations, let the veto stand, or try to override the veto with a two-thirds majority. (Reforma 11/9)
Posted in Economy
Following are the tallies in the large-scale killings or massacres that have occurred this year, pieced together from a variety of sources.
Naval marines surrounded and killed the leader of the Gulf Cartel, Antonio Ezequiel Cárdenas Guillén, aka Tony Tormenta and four of his bodyguards in a pitched battle in the border city of Matamoros. Columnist Raymundo Riva Palacio called it the government’s “most paradigmatic success in the 47 month long war against drugs.” The operation, which left three Marines dead and another four wounded, cements the position of the Marines as the elite agency for strikes against drug kingpins. Two reporters were also killed in the crossfire. The Navy said the operation to trap Cárdenas began six months ago with intelligence derived from the capture of some of the Gulf Cartel’s paramilitary wing, the Scorpions. The U.S. DEA also reportedly provided intelligence that assisted in locating Cárdenas. The Navy said that Cardenas had evaded capture on two separate occasions in the last month prior to this final operation. The Marines deployed 660 troops, 3 helicopters, and 17 vehicles in the operation, while the Army provided an outer ring of security to prevent cartel reinforcements from reaching their leader. (Eje Central 11/8)
NPR’s John Burnett has an extensive report on the military operation, the struggle between the Gulf Cartel and Los Zetas, and the impact on Matamoros.
Death toll by month. Source: Reforma
According to the tally kept by Reforma, the death toll from the drug war passed the 10,000 mark this week, reaching 10,035 killed since the start of the year. This surpasses 2009’s full year record by more than 50%, with almost two months still to go. (On the sporadic occasions when the government has released it’s own statistics they have been significantly higher than the tallies kept by the news organizations.) Of Reforma’s total, 52 were military and 637 were police officers. Chihuahua continues to be the bloodiest state, with 2,797 killed. (Reforma 11/4)
Death toll by state. Source: Reforma