Oil reform won't reverse Pemex woes -Mexico finmin

MEXICO CITY, July 1 (Reuters) - Mexican Finance Minister Agustin Carstens said on Tuesday a proposed reform to overhaul the country's oil sector would not be enough to reverse the woes of national oil monopoly Pemex.

Proponents of the reform plan say it could shore up declining output and reserves by hiring experienced foreign companies under performance-based contracts to speed up Mexico's entry to the crucial deep-sea oil sector.

But leftists in the divided Congress strongly oppose loosening state control of the oil sector, and most analysts expect conservative President Felipe Calderon's proposal to be heavily watered down.

"The energy reform that emerges after this debate ... is not going to be the definitive energy reform that will solve Pemex's problems over the next 20 to 30 years," Carstens told reporters after participating in a televised Congress debate on the issue.

Calderon's government still hopes to persuade opposition parties to back allowing more private-sector contracts in the struggling oil sector.

But leftists are set against the idea and centrists -- whose vote will be crucial -- are wary of a clause allowing "incentive-fee" contracts in exploration and production.

Sit-in protests in Congress by leftists in April forced discussion of the bill to be delayed while lawmakers sit down for weeks of televised debates which are set to last until late July.

Carstens, who took part in one of the debates on Tuesday, said even if an energy law is passed, Pemex would still be weighed down by problems.

Mexico is the world's No. 6 oil producer, according to the U.S. Energy Information Administration, but its production has been slipping since 2004, and reserves are also on the wane.