Mexico City, Mexico - A former executive of Petroleos Mexicanos (Pemex) stated that the labor liabilities of the oil giant exceed more than $62.4 billion - a problem that must be resolved before energy reform can take shape.

Giacomán Ernesto Marcos, former director of Pemex Finance, said it is necessary to modernize the collective bargaining agreement in the state owned enterprise and implement results-based payment incentives. It should also clearly define responsibilities in each work area, with the goal of achieving greater medium and long term efficiency and results.

"The calculation of liabilities is just over 800 billion pesos, which represents over 50 percent of the total assets of Pemex. This means that it owes to its employees, retirees, and those in active employment half of the worth its refineries, oil wells, drilling rigs, and platforms at sea," he said.

The former exec said that this situation stems from the fact Pemex does not have a defined contribution retirement strategy in place, to meet the obligations that the company has to 70,000 of its retirees and around 140 of active employees.

Interviewed at the end of his participation in the Energy Reform Symposium at Anahuac University, he stressed the need to establish such a mechanism - similar to those that have been successfully implemented in some other parastatal companies such as the Federal Electricity Commission.

According to Marcos, these changes in the labor contract are part of new reforms and actions that should be adopted to make Pemex a competitive company.

"As part of the proposals," Marcos said, "it is necessary to adopt reforms that would allow Pemex to make alliances with other oil companies in the world, for exploration and exploitation, in order to maximize its oil revenues."

He insisted that if Pemex remains the one doing all the work in oil, it cannot concentrate on development for the long term, as has happened so far.

It is therefore advisable to release the government yoke, to enable it to "efficiently perform the work that is most profitable," he said.