King & Spalding (JD Supra Mexico)

On March 26, 2021, the President of Mexico, Andrés Manuel López Obrador (“AMLO”), sent a new bill to Congress intended to amend the Federal Hydrocarbons Law (the “Hydrocarbons Bill”). This is AMLO’s latest attempt to upend the Mexican energy sector and to restore the dominance of PEMEX, the national oil company.

On March 2, 2021, and after a short-lived debate, the Mexican Federal Senate approved a bill that will modify Mexico’s Electricity Industry Law, effectively reversing rights granted to private investors in that sector (the “Reform Bill”). The Reform Bill will be sent now to the executive for enactment and is expected to come into effect in the following days.

In the final days of December, Mexico issued new regulations that limit the ability of private companies to import and export fuel and hydrocarbons. Then, in the first week of this year, Mexico’s President, Mr. Lopez Obrador, announced his plans to eliminate autonomous industry regulators altogether, and have the relevant ministries absorb their functions. These developments are consistent with

On April 5, 2020, in the first quarterly report of his second year of government, Mexico’s president, Andrés Manuel López Obrador (“AMLO”) reiterated his intention to unveil a long-awaited energy-infrastructure plan. The plan will be part of his government’s economic strategy to revive the Mexican economy following the deceleration resulting from the COVID-19 pandemic...

On April 29, 2020, CENACE —the Mexican Electricity Grid Operator— issued an administrative Decision ordering the suspension of all preoperative tests for wind and solar PV plants for an indefinite period of time to allegedly “protect the efficiency, quality and security of the National Electric System” amid the COVID-19 pandemic.1 The Decision impacts new renewable energy projects currently...

Pemex, the Mexican national oil company, recently published its 2019-2023 business plan which outlines the economic strategy that Pemex and its subsidiaries will adopt and implement during that period. Pemex’s business plan was received with mixed feelings. While some key players of the oil & gas industry understand that the business plan is consistent with the new administration’s envisioned...

On April 12, 2018, King & Spalding, alongside the Mexican law firm Gonzalez Calvillo, hosted its quarterly Energy Forum in Houston, Texas. Attended by approximately 100 guests, the Energy Forum featured three panels of experts ranging from banking experts and project developers to Mexican government officials.

Centro Nacional de Control de Gas Natural (CENAGAS) has received authorization from the Comisión Reguladora de Energía (CRE) to conduct its first open season for the assignment of available capacity on a firm basis in the country´s integrated natural gas national pipeline and storage system. The system, also known as Sistrangás, includes more than 5,400 miles of pipelines formerly owned by Pemex,

On June 7, the Mexican Ministry of the Economy (“Economía”) issued the final determination in its antidumping investigation on imports of apples from the United States, terminating such investigation on the basis of the absence of a causal link between the investigated imports and injury to the domestic industry. This is the first time Economía has issued a negative determination on injury or...

Mexico has prepared a plan for the development and implementation of an open and competitive marketplace for natural gas (Implementation Plan). The hope is that the Implementation Plan will result in a fully competitive Mexican natural gas market by sometime in 2018. The Secretary of Energy has recently published the Implementation Plan for public comment, in a document entitled “Política...

In a major step toward the implementation of a modern and competitive wholesale electricity market in Mexico (the "Wholesale Market"), on September 8, 2015 the Secretaría de Energía ("SENER") published the first set of regulations establishing the Wholesale Market's design and operating principles, and governing the marketing of electricity, ancillary services, renewable energy certificates,...

On July 15, Mexico auctioned 14 shallow-water exploration blocks. The auction marked the first time in nearly eight decades that private and foreign investors could directly participate in Mexico's exploration and production of oil reserves since the industry was nationalized in 1938. Despite Mexico's high expectations for this first round of bids, only two of the 14 Blocks were successfully...

The Comisión Nacional de Hidrocarburos (CNH) has issued the first call for bids under Round One and the terms and conditions (T&Cs) governing the tender. CNH seeks to award 14 production-sharing contracts for the exploration and production (E&P) of hydrocarbons in 14 areas located in shallow waters offshore the States of Veracruz, Tabasco and Campeche (Gulf of Mexico). Additional tenders for the...

Although much of the buzz around Mexico's energy reform focused on the oil & gas sector, the Mexican power sector also underwent a fundamental change. Together with eight new and twelve amended federal laws, Mexico's President, Enrique Peña Nieto enacted the Ley de la Industria Eléctrica (the "Act") on August 11, 2014.

Historical Background - Early Mexican E&P: Early in the last century, Mexico became both an important oil producing nation and trendsetter in nationalization of oil industries. In the process it told a cautionary tale of the costs of both an under-regulated investment environment and a heavy-handed, statistic approach to conducting a national oil and gas industry.

Yesterday, Mexican President Enrique Peña Nieto promulgated 21 new and amended laws which regulate last December´s historic constitutional energy reform. Among others, the new laws include a Hydrocarbons Law, which governs the upstream, midstream and downstream oil and gas sectors, a Hydrocarbons Revenues Law, which governs the manner in which the State may generate income in such sectors, and...

On March 21, 2014 Petróleos Mexicanos (Pemex) submitted its "round zero" proposal to the Secretaría de Energía (SENER), Mexico's department of energy. Although the details of the proposal are not yet public, SENER has indicated Pemex seeks to retain control of all areas in which it is currently producing hydrocarbons in commercial quantities and all exploration areas in which it has made a...

The recent constitutional reform of the Mexican energy sector will catapult Petróleos Mexicanos (Pemex) and Comisión Federal de Electricidad (CFE) into an unfamiliar competitive market environment. The rules of the game are not yet in place, but the former state monopolies over oil and gas exploration and production and electricity generation activities expect to compete in the broader national...

On March 21, 2014 Petróleos Mexicanos (Pemex) submitted its round zero proposal to the Secretaría de Energía (SENER), Mexico’s department of energy. Although the details of the proposal are not yet public, SENER has indicated Pemex seeks to retain control of all areas in which it is currently producing hydrocarbons in commercial quantities and all exploration areas in which it has made a...

In an unprecedented change in Mexican energy politics, the government has amended its Political Constitution to allow the participation of private capital in its upstream, midstream and downstream oil and gas businesses. The extraordinary step continues a liberalization trend that commenced more than twenty years ago when then President Carlos Salinas de Gortari privatized the banking industry,...

In what amounts to a sea-change in Mexican energy politics, each of a parliamentary group of Partido Acción Nacional ("PAN") and the President of Mexico, Enrique Peña Nieto, is sponsoring its own bill to amend the Mexican Constitution to permit, for the first time in generations, the participation of private capital in Mexico's upstream oil and gas business.

On October 18, 2012, Pemex Exploración y Producción (PEP) published a model contract to be used in the bidding for E&P contracts in Chicontepec (the “Model”), an area in the eastern coastal plains of Mexico estimated to contain 33 percent of the country’s total hydrocarbons reserves. A total of six areas, representing 3,195 mmboe and 15 percent of Chicontepec’s total reserves, are now being...