On February 4, 2025, the Senate received an initiative with a draft Decree to issue eight secondary laws and amend three others related to the energy sector. Regarding hydrocarbons, the draft Decree includes the issuance of laws such as the Hydrocarbons Sector Law and the Biofuels Law.
On February 4, 2025, the Senate received an initiative with a draft Decree to issue eight secondary laws and amend three others related to the energy sector, which form part of the secondary legislation to the constitutional reforms to Articles 25, 27, and 28 carried out last year (the “Draft Decree”). Regarding hydrocarbons, the Draft Decree includes the issuance of the following laws: (i) Hydrocarbons Sector Law (“HSL”); (ii) Law of the State-Owned Enterprise, Petróleos Mexicanos (“PEMEX Law”); (iii) National Energy Commission Law (“NECL”); and (iv) Biofuels Law (“BL”); which will be submitted to the Congress of the Union for discussion and eventual approval.
The Draft Decree confirms the transformation of Petróleos Mexicanos (“PEMEX”) into a State-Owned Enterprise, thereby establishing a new regulatory framework where governmental intervention will prevail in the planning and operation of the hydrocarbons sector.
Below is an executive summary of the secondary law initiatives in the hydrocarbons sector highlighting the most relevant points:
A. Hydrocarbons Sector Law
The HSL aims to focus primarily on the public sector and its exclusive strategic areas to benefit PEMEX in hydrocarbons activities. Regarding private participation in hydrocarbons activities, new schemes are established where private participation is allowed, but priority is given to PEMEX's activities. Additionally, the HSL repeals the Hydrocarbons Law dated August 11, 2014. The most relevant changes proposed in the HSL are detailed below:
• Elimination of the National Hydrocarbons Commission and the Energy Regulatory Commission: The Ministry of Energy (“SENER”), through the National Energy Commission (“NEC”), will now be responsible for issuing and enforcing technical regulations in the hydrocarbons sector.
• Permits for Hydrocarbons Activities: The HSL introduces regulatory changes regarding permits for hydrocarbons activities:
1. Initiative with a Draft Decree to issue the Law of the State-Owned Enterprise, Federal Electricity Commission; the Law of the State-Owned Enterprise, Petróleos Mexicanos; the Electric Sector Law; the Hydrocarbons Sector Law; the Energy Transition and Planning Law; the Biofuels Law; the Geothermal Law; and the National Energy Commission Law; to amend various provisions of the Mexican Petroleum Fund for Stabilization and Development Law and to amend, add, and repeal various provisions of the Hydrocarbons Revenue Law and the Organic Law of the Federal Public Administration.
- SENER will be responsible for issuing permits for (i) importation, exportation, storage, and transportation of oil, and (ii) importation and exportation of natural gas, petroleum products, and petrochemicals.
- NEC will be responsible for permits for: (i) processing, transportation, storage, distribution, marketing, and retailing of natural gas; (ii) formulation, transportation, storage, distribution, marketing, and retailing of petroleum products; (iii) transportation, storage, marketing of petrochemicals; and (iv) management of Integrated Systems.
Importation permit holders will be jointly liable for tax matters related to other regulated activities associated with importation.
• Allocations for Hydrocarbons Exploration and Extraction Activities: The HSL provides the following schemes for granting allocations for hydrocarbons exploration and extraction:
i. Own Development, allocations granted for exclusive use by PEMEX;
ii. Mixed Development, allocations where PEMEX requests private sector participation to complement its technical, operational, and financial capacities for hydrocarbons exploration and extraction activities; and
iii. Contracts for Hydrocarbons Exploration and Extraction, exceptionally, when PEMEX has no interest or capacity to develop an allocation, the HSL allows for tenders for contracts for hydrocarbons exploration and extraction activities to be carried out by the private sector.
• Allocation of Contracts for Exploration and Extraction: SENER will be the sole authority empowered to grant contracts for exploration and extraction through public tenders and will establish the corresponding contracting model, including service contracts, profit-sharing contracts, production-sharing contracts, or license contracts. PEMEX and its subsidiaries may enter into alliances, mixed development schemes, or partnerships with the private sector and jointly participate in public tenders.
• Priority to PEMEX in Integrated Systems: Under the HSL, it is stipulated that within Integrated Systems (e.g., transportation and storage), priority must be given to the allocation of necessary capacity for the activities of State-Owned Enterprises (i.e., PEMEX and Federal Electricity Commission) as they are of public interest; however, it is not specified whether the priority will apply to available capacity or reserved capacity within the Integrated Systems.
• Open Access Does Not Apply to PEMEX: It is maintained that permit holders are obligated to provide non-unduly discriminatory open access to their facilities and services for the transportation, distribution through pipelines, and storage of hydrocarbons, petroleum products, and petrochemicals, except that this open access obligation will not apply to State-Owned Enterprises or their subsidiaries.
