Fox Adds Business Executives to Pemex Board

Mexican President Vicente Fox appointed top executives to the board of Petroleos Mexicanos, hoping to reshape the state-owned oil company’s operations and improve profit. The move broke 62 years of tradition in turning to private business rather than the state for new Pemex board members. Fox also said he will revamp tax rules for Pemex, which finances a third of government spending and is required to turn over all its revenue once costs are covered, to help it operate more as a private company. The board appointees include Carlos Slim Helu, Latin America’s wealthiest businessman and controlling owner of telephone company Telefonos de Mexico; Lorenzo Zambrano, head of the world’s third-largest cement maker, Cemex; and Alfonso Romo, chairman of seed and insurance group Pulsar Internacional. Fox even turned to an international company, naming Rogelio Rebolledo, president and chief executive of PepsiCo Inc.’s Frito Lay division for Latin America, Asia and Australia. The planned tax changes are aimed at allowing Pemex to boost investment. Current tax rules limit Pemex’s capacity to expand and meet Mexico’s fuel needs. Even as the world’s fifth-largest oil company, Pemex needs to import gasoline, natural gas and fuel oil because it doesn’t have the resources to upgrade or build new refineries.