UPDATE 2-Mexico warns of energy crisis without overhaul

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By Jason Lange

MEXICO CITY, May 8 (Reuters) - Mexico will suffer a severe energy crisis within a decade unless the troubled oil sector is overhauled, Mexican Energy Minister Georgina Kessel warned on Thursday.

Kessel urged lawmakers to approve an energy reform plan by President Felipe Calderon to reverse a drop in oil output by letting private companies have a bigger role in the state-run energy industry.

"If we don't do anything, Mexico will face a severe energy crisis before the next presidential administration ends (in 2018)," Kessel told lawmakers.

Mexico is the world's No. 6 oil producer and a top supplier to the United States.

Calderon's plan, presented in April, has met stiff opposition from leftists, who say the government wants to hand over the cherished state oil monopoly Pemex to investors.

Mexicans are passionately protective of Pemex, which finances a third of government spending but faces falling reserves and lacks funds and expertise for exploration.

After leftist lawmakers held sit-ins in Congress to protest the proposal, the government agreed to hold more than two months of debate about the future of the oil sector.