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Cablegate: Mexican President Drums Up Oilpatch Investment During

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS CALGARY 000577

SIPDIS

STATE FOR WHA/CAN, EB/ESC/ISC, EB/EPPD

USDOE FOR IA (DEVITO, PUMPHREY, DEUTSCH)

E.O. 12958: N/A
TAGS: ENRG EPET ETRD PGOV XM CA
SUBJECT: MEXICAN PRESIDENT DRUMS UP OILPATCH INVESTMENT DURING
CALGARY VISIT

1. (SBU) Calgary was the first stop on Mexican President Vicente
Fox's whirlwind tour of Western Canada on Thursday, September
29th. The trip was designed to "strengthen commercial,
political and educational ties between Western Canada and
Mexico". During his one-day visit to Calgary, President Fox,
focused primarily on meeting with officials in Alberta's
oilpatch, but also met with other political leaders,
representatives from local Mexican communities, and the media.
This was President Fox's first visit to Calgary. His last trip
to Canada was to Ottawa in October 2004.

2. (SBU) The centerpiece of the Mexican President's Calgary
visit was a luncheon hosted by Alberta Intergovernmental and
International Relations Minister Ed Stelmach, who represented
Premier Ralph Klein. The Alberta Premier was in South Africa
attending the World Petroleum Congress. Officials from
Alberta's energy, agricultural and education sectors attended
the luncheon, as well as Fox's entourage of 30 Mexican business
leaders. President Fox used the luncheon as a forum to
encourage investment in Pemex, Mexico's state-owned energy
company, saying the Mexican Government has made huge strides in
the past five years in fighting corruption and improving
stability. President Fox also reiterated his support for NAFTA,
presenting his plan for expanding the organization's role,
including a new provision for energy. Since the commencement of
NAFTA, Alberta-Mexico trade has quadrupled to C$15.73 billion.
As an aside, President Fox stayed neutral on the current
softwood lumber "trade war" between the United States and
Canada, adding that he regrets "any unilateral decision that
fails to abide by the decisions of the arbitration panels where
trade differences are discussed and aired".

3. (SBU) The luncheon was followed by a conference held at the
University of Calgary, where President Fox discussed new oil
exploration and recovery techniques with university researchers.
The meeting was marred just hours before President Fox's
arrival, when two mail workers were hospitalized for injuries
sustained when a suspicious package was opened, releasing an
unknown substance into the air. It was unknown whether the
incident was related to President Fox's visit. There was also a
small protest outside the university, organized by the parents
of a Calgary college student who was murdered while enrolled in
a Mexican exchange program. The student's mother, Ms. Cher
Ewing, told reporters she was attempting to force President Fox
to better enforce organized crime statutes.

---------------
Comment
---------------

4. (SBU) The primary focus of President Fox's visit to Alberta
was to lay the groundwork for future natural gas deals with
resource rich Alberta. The Mexican President, who has attempted
to visit Alberta several times over the last five years, has
repeatedly warned of the need for a diversification of Mexican
energy resources. His visit, while welcomed by members of the
oilpatch, highlighted current energy problems facing the Mexican
government. Local energy analysts believe the President's plans
for reform are a step in the right direction, but hold out
little hope that the President's efforts to allow for a larger
role for private investment in cash-strapped Pemex will come to
fruition any time soon.

5. (SBU) That said, the Mexican Trade Consul in Calgary, who
accompanied President Fox to all of his Calgary meetings, told
Econ Assistant that the President's message was well received
and there continues to be much interest in investing in Mexico's
energy sector. The Trade Consul said it is "painful" to let
Mexico's resources sit in the ground if oil belongs to all
Mexicans." He opined that it would not be necessary to reopen
the Mexican Constitution to implement the kind of reform that
President Fox is aiming toward. He claims that "interpretation"
of certain wording within the Mexican Constitution will play an
important role in determining how "private" investment rather
than "foreign" investment could occur in Mexico. In any event,
the Consul suggested that President Fox plans to announce such
reform before the end of the year.

NOWLAN

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