Mexican senate begins deliberating new policies regarding the denationalization of Pemex

Mexico’s senate began discussions Tuesday on enabling legislation to implement historic constitutional reform opening the country’s oil industry to foreign investment for the first time since 1938.

President Enrique Peña Nieto had already signed the controversial measure after it was approved by Congress and ratified by a majority of states, but lawmakers must now pass “secondary” laws to implement it.

That process began Tuesday with the energy and legislative affairs committees holding an extraordinary session on the basis of a draft drawn up by two of the country’s leading parties, the Institutional Revolutionary Party (PRI) and the conservative National Action Party (PAN).

Foreign oil giants are keen to get a glimpse of the legislation because it will detail how the contract system will work.

But the left-wing Democratic Revolution Party (PRD), vehemently opposes the reforms and issued a statement Tuesday reiterating its stance.

It is hoping to hold a referendum in 2015 to overturn the measures and has accused the ruling PRI of “political opportunism” by seizing on the public’s passion for soccer and scheduling debates during the month-long World Cup. The clash of calendars sparked a political storm, with opponents of the legislation crying foul.

The government contends the reform will allow for modernization and more economic autonomy for state oil company Pemex.

The lower house of Congress will hold special sessions from May 29 to June 19 to debate and vote on the energy reform rules.

Lawmakers are then set to call an extraordinary session of Congress to vote on the secondary laws, which the government hopes will be approved by the end of June.

Peña Nieto’s Institutional Revolutionary Party lacks a majority in Congress. It is relying on support from the conservative National Action Party to see through the energy reform.

Lazaro Cardenas, who served as president of Mexico from 1934 to 1940, nationalized the country’s petroleum reserves and expropriated the equipment of the foreign oil companies in 1938. Cardenas also founded Pemex in a move that would later serve as a model for other countries seeking control over their oil and natural gas resources.

Mexico’s oil production has seen a significant drop over the past decade.