Overview of the Mexico Energy Reform

Abstract

Dennis R. Luna and Olman J. Valverde will provide a general overview of sweeping and historic changes that are currently being made to the legal and regulatory schemes that govern Mexico's energy industry. In December 2013, President Enrique Pena Nieto launched the reform of Mexico's energy sector through a constitutional amendment that opened the oil and gas industry, and the power generation sector, to private participation. Prior to the constitutional amendment, the Mexican energy industry was for most purposes not open to foreign investment. On August 12, 2014, Mexico adopted nine new “secondary laws” as well as amendments to existing laws which implement the December 2013 constitutional changes. With respect to Mexico's oil and gas industry, the changes are being made in order to increase Mexico's diminishing production of hydrocarbons. Despite an increase in investment by Mexico in exploration and extraction, oil production in Mexico declined from 3.4 million barrels per day in 2004 to 2.5 million in 2012, with consequent negative effects on the Mexican economy. By making these changes, Mexico hopes to invigorate its production of oil and gas by attracting significant outside investment for the first time since foreign oil companies were ousted in 1938. The energy reform presents an opportunity both for Mexico and for foreign investors as the process unfolds over the next several years and decades. At this point in time, with decades of experience and investment in energy by the private sector the U.S., there is significant opportunity for U.S. companies to become involved. The presentation will cover the following topics: Legal Structure, Bidding Process, Regulatory Agencies, New Secondary Laws, Changes to Existing Laws, Business Issues, Current Issues

AAPG Datapages/Search and Discovery Article #90215 © 2015 Pacific Section AAPG Convention, Oxnard, California, May 3-6, 2015