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MEXICO CITY, July 31 (Reuters) - Lawmakers from Mexico's conservative National Action Party (PAN) on Wednesday proposed opening up the state-run oil sector to private interests for the first time since the industry was nationalized in 1938, calling for changes to the constitution to give oil companies incentives to boost the country's sliding energy output.
Mexico's sole oil and gas operator is state-run monopoly Pemex.
The PAN's market-friendly bill marks the opening bid in what is expected to be a heated debate over the future of Mexico's ample oil and gas reserves. Mexico is the world's 10th-biggest crude oil producer, according to data from the Organization of the Petroleum Exporting Countries.
The conservative party's proposed legislation is broadly in line with the thinking of President Enrique Pena Nieto's ruling Institutional Revolutionary Party, or PRI, which has yet to detail its own proposal to overhaul the sector.
The leftist Party of the Democratic Revolution (PRD) has made clear it will not back constitutional changes, which it argues are tantamount to privatization.
Mexico's government is set to present its proposal, which is expected to be similar to PAN's bill, later in August, and needs the PAN's backing to push through a reform.
That would bypass a political pact forged by the three parties, which forged consensus on a batch of economic reforms, and could complicate future reform efforts.
The PAN's proposal would end a prohibition on oil and gas concessions and risk-sharing contracts enshrined in Article 27 of the constitution.
The text of the PAN's proposed constitutional amendment says the state "should guarantee the maximum benefit of oil profits for the nation from the work of the operators who conduct exploration and production activities."
The PAN's bill was filed with the Senate, which will formally kick off the energy reform debate on Sept. 1 when the new congressional session begins.