Thousands protest Mexico energy reform plan

By Michael O'Boyle

MEXICO CITY (Reuters) - Thousands of people, some dressed in oil worker jumpsuits, protested a Mexican energy reform proposal on Sunday that leftists say is a veiled attempt to privatize the cherished state industry.

Decrying government plans to allow more private investment in state-run oil monopoly Pemex, protesters carried signs saying "This is a holdup!" and showed pictures of President Felipe Calderon holding a gasoline pump like a gun.

Mexico is the world's sixth-largest producer of crude oil and the third biggest supplier of oil to the United States. But output and reserves are falling after years of underinvestment and decades of using Pemex as a government cash cow.

Police said more than 30,000 people marched through central Mexico City to gather in the massive Zocalo square, led by leftist firebrand Andres Manuel Lopez Obrador, who narrowly lost the presidency to Calderon in 2006.

"Calderon's proposal is a privatizing reform that is going to damage the most valuable resource that we Mexicans have," said Luis Reyes, a former engineer at Mexico's National Petroleum Institute.

Supporters of the energy plan say Pemex has long worked with private companies and that Calderon's plans only seek to harness private sector know-how, not to sell off Pemex.

"The state will never lose control of the company," the Energy Ministry said in a statement on Sunday.