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 News Around the Republic of Mexico | March 2008 
Calderón's Oil Reform Faces Threat From Left
 Sean Mattson - San Antonio Express-News
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 |  | I think this is very bad news for Calderón.
- George Grayson |  | | | |
Monterrey, Mexico — The radical wing of the country's main leftist party appears to have won a party leadership election, which could deal a significant blow to President Felipe Calderón's ambitious plans for oil sector reform.
Alejandro Encinas won the presidency of the Democratic Revolution Party, or PRD, according to preliminary results released late Sunday.
Encinas is closely aligned with Andrés Manuel López Obrador, who lost a close race for the Mexican presidency to Calderón in 2006 and who is reviving his political career by emphatically opposing private investment in Mexico's troubled government oil monopoly.
Encinas beat Jesús Ortega, a career lawmaker who leads a moderate wing of the PRD that analysts consider less opposed to energy reform.
"I think this is very bad news for Calderón," said George Grayson, a government professor and Mexico expert at the College of William and Mary in Virginia.
The PRD leadership contest follows the controversial revelation that Juan Camilo Mouriño, Calderón's new interior minister, signed contracts with the government oil company, Petróleos Mexicanos, or Pemex, on behalf of his family's business between 2000 and 2004.
At the time, Mouriño was a congressman heading the lower house's energy committee and later worked in the Energy Ministry under then-energy minister Calderón.
Most analysts doubt Mouriño did anything illegal. But the allegations of conflict of interest are fueling opposition to reforms Mouriño was expected to spearhead for Calderón.
"It just smells like month-old fish," Grayson said.
Encinas' apparent victory reaffirms López Obrador's power within his party, said Enrique Bravo, a risk analyst with the Eurasia Group in Washington.
The PRD alone can't block energy reform, but analysts said Encinas' victory will embolden reform-averse members of the Institutional Revolutionary Party, or PRI, which is expected to work out a bill with Calderón's National Action Party, or PAN.
The PAN favors "strategic alliances" with foreign energy firms for exploring the deep waters of the Gulf of Mexico, considered the final frontier of Mexico's dwindling oil reserves.
But such alliances imply profit-sharing, which the PRI may oppose due to nationalistic sensitivity. Today, Mexico marks the 70th anniversary of the oil industry's nationalization.
Mexico is the sixth-largest producer of crude oil but has reserves for only 10 more years of production, according to government figures.
"These recent developments are not likely to derail the PRI-Calderon negotiations, but are likely to postpone a final vote on energy reform after the current legislative period to September-October 2008," Bravo said.
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