Mexican opposition holds leadership vote that may impact reforms

MEXICO CITY (Reuters) - Mexico's biggest opposition party on Sunday holds a leadership election whose outcome could shape how quickly President Enrique Pena Nieto can pass pending legislation to open up the oil industry and increase competition in telecoms. The center-right National Action Party (PAN), has been badly divided by a bitter internal power struggle, making it harder for the party to work with Pena Nieto's Institutional Revolutionary Party (PRI), which has no majority in Congress. Pena Nieto has relied on PAN votes to help pass laws, including a reform in December to end Mexico's 75-year-old oil and gas monopoly, as well as a major overhaul of the telecoms industry dominated by multi-billionaire Carlos Slim. Both reforms still need rules and regulations to be set out in so-called secondary legislation, but disputes in Congress, partly due to PAN infighting, have delayed the approval process. The centrist PRI had hoped to pass the secondary laws by the end of April at the latest, and now has its sights on June. However, some officials worry it could take longer. The PAN battle pits loyalists of party leader Gustavo Madero, who has worked with Pena Nieto to pass legislation, against Ernesto Cordero, a former finance minister keen to push the party in a direction more critical of the government. Elected by PAN members, the future leader will have to reunite a party still coming to terms with its loss of the presidency in 2012 to PRI after more than a decade in power. Recent polls suggest Madero is favorite to retain the leadership, but the outcome could be close. Results are expected from around 7 p.m. local time (2000 ET). PRICE TO PAY Jorge Buendia, head of polling firm Buendia & Laredo, said a narrow Madero victory would be the worst possible result for the legislative process because it will likely be challenged by Cordero and inflame existing tensions within PAN. A Madero win by at least 10 points would be interpreted as a vote of confidence for cross-party cooperation, while a victory for Cordero would probably mean Pena Nieto will have to pay a higher price to get what he wants in Congress, Buendia said. That could easily involve more concessions on political reforms designed to weaken PRI, which ruled Mexico for 71 straight years until PAN ousted it in a 2000 election. Madero argues he is restoring the party's fortunes by forcing Pena Nieto to adopt PAN's vision of economic reform, a strategy that yielded fruit with the energy law, which ended up much more liberal than the one the president first proposed. Cordero, an ally of former President Felipe Calderon, also backed the energy reform and other major bills, which aim to end years of underperformance by Latin America's No. 2 economy. But he has accused of Madero of selling out to Pena Nieto. (Reporting by Dave Graham; Editing by Sophie Hares)