Mexico City: Mexico’s Congress gave final approval to a historic energy reform that will open the state-controlled sector to foreign investment for the first time since 1938.

After a marathon debate, the Senate voted 78-26 for the package of bills that will break the monopoly that has been held by state-run energy giant Pemex since foreign companies were kicked out of Mexico 75 years ago.

The legislation, which was already approved by the lower house of Congress, now goes to President Enrique Pena Nieto’s desk for his signature.

The reform is the centrepiece of Pena Nieto’s reform drive to breathe new life into Latin America’s second biggest economy.

It will allow foreign companies to sign profit-sharing contracts with Mexico as soon as next year and drill for oil and natural gas.

“Mexico can’t stay as it is. Mexico must change to combat poverty and inequality, which is why we want to increase oil profits,” said Senator David Penchyna of the ruling Institutional Revolutionary Party (PRI) during a heated debate.

The government argues that the legislation will boost growth, create jobs and reverse declining oil production.

But the leftist opposition says the reform amounts to a damaging privatization of Pemex, the country’s main source of tax revenue and a symbol of national sovereignty.

“Our dear Mexico is becoming more and more like a restaurant where foreign customers can enjoy our energy resources without limits and almost for free,” said Senator Fernando Mayans Canabal of the leftist Democratic Revolution Party (PRD).

PRD lawmakers brought a life-size picture of late former president Lazaro Cardenas to the Senate floor and accused the PRI of betraying the legacy of the man who nationalized the oil industry in 1938.

The constitutional reform was approved in December with the backing of Pena Nieto’s centrist PRI and the conservative National Action Party (PAN).

But to be enacted, the Congress needed to pass “secondary laws” that outline how contracts will be offered, among other things.

Major oil companies have kept a close eye on the legislation, with US giant ExxonMobil and British rival BP leading an “energy task force” within the American Chamber of Commerce of Mexico.

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