On May 25 2011 the Federal Commission for Regulatory Improvement (Cofemer) announced an exemption from the regulatory impact assessment process for certain amendments to Mexico's mining legislation. The amendments, submitted by the Ministry of Energy, are intended to update the Mining Law Regulations on Coal-Bed Methane.

The Mining Law permits mining concessionaires to develop coal-bed methane reservoirs for their own consumption or for the production of gas for delivery to Pemex. Coal-bed methane is delivered to Pemex under a contract which establishes, among other things, the consideration payable to the concessionaire. Such consideration must be based on the investments and the operation and maintenance expenses associated with the recovery, transportation and delivery of the gas, plus a reasonable rate of return.

The proposed amendments state that applications by mining concessionaires for a permit for coal-bed methane production must include:

  • a description of the scope of the project and the facilities for the extraction, measurement and use of the coal-bed methane; and
  • a specification of the intended use of the methane (ie, self-consumption, delivery to Pemex or both).

The amendments also provide that in the case of projects for gas to be delivered to Pemex, the ministry may refuse to issue a permit on certain grounds - for example, where it considers that:

  • the project is not a feasible means of obtaining, measuring, using or delivering coal-bed methane; or
  • the project infrastructure is inadequate to comply with the technical and qualitative conditions required at the point of delivery.

As a result of Cofemer's exemption, the amendments are expected to be published and effective shortly.

For further information on this topic please contact Rogelio López-Velarde or Ruben Almaraz at López Velarde, Heftye y Soria by telephone (+52 55 3685 3334), fax (+52 55 3685 3399) or email ([email protected] or [email protected]).