On July 8, 2020, the Ministry of Energy (SENER by its acronym in Spanish) published, in the Federal Official Gazette (DOF by its acronym in Spanish), the Energy Sector Program 2020-2024 (the «Program») and the decree by means of which the aforementioned Program is approved (the “Decree”).

The main objective of the Program is to reposition the Federal Electricity Commission and Petróleos Mexicanos («CFE» and «PEMEX», respectively) in the market, so as to restore their role as guarantors of energy security and autonomy in the country and to promote national growth to generate a multiplier effect in the private sector.

The Program seeks to develop and promote the energy sector to achieve self-sufficiency, and therefore, guarantee the supply of clean energy (primary and secondary) required by the economy and society, with conditions of environmental sustainability and sustainability in the short, medium and long term, along with the participation of the private sector.

The Program’s main purposes and objectives are the following: 

1. Achieve and maintain the sustainable energy self-sufficiency required to meet the energy demand of the population. 2. Reinforce the for-profit companies of the Mexican State as guarantors of energy security and autonomy and as a source of leverage for national growth, to generate a multiplier effect in the private sector. 3. Organize the scientific, technological and industrial resources necessary for Mexico’s energy transition throughout the 21st century. 4. Improve the level of efficiency and sustainability in the production and use of energy in the national territory. 5. Guarantee equal access to energies, in order for all the Mexican population to have access thereto for its development. 6. Strengthen the national energy sector so it constitutes the foundation that promotes the development of Mexico as a powerful player able to satisfy its basic needs with its own resources, through its for-profit companies of the State and the public and private entities.

As for the hydrocarbons sector, it is noted that, to reduce the amounts of imported products and to satisfy the demand of the Mexican economy with national production through PEMEX, there is a need to increase hydrocarbons exploration activities, hydrocarbon and oil-related products’ infrastructure and the processing capacity at refineries,.

As for the national electricity sector, the purpose is to increase electricity generation with clean energies, incorporating them in an efficient way into the national electricity market and to fulfil the agreements and achieve the goals in connection with climate change and the reduction of emissions set forth in the General Law on Climate Change (Ley General de Cambio Climático) and the Energy Transition Law (Ley de Transición Energética), in order for CFE to participate in the electricity industry under equal conditions.

The Program and the Decree entered into force the day after its publication in the DOF.