Energy, Mining and Infrastructure
Legal Alert August, 2014
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Mexico's Energy Reform
Petroleos Mexicanos Law (PEMEX Law)Background
On August 11 2014, it was published in the Federal Official Gazette the Decree whereby the new Petroleos Mexicanos Law (the “Law”) is issued.
With this Law, PEMEX becomes a State Productive Company, foreseeing the merger of (i) PEMEX-Exploracion y Produccion with PEMEX-Gas y Petroquimica Basica, and (ii) PEMEX-Petroquimica with PEMEX Refinacion.
Implications for PEMEX's contractors
PEMEX’s Board of Directors will issue the necessary provisions in order for any and all procurements carried out by itself or by its subsidiary productive companies, comply with the constitutional principles of adequate public expenditure. Also, the Law of Public Works and Services Related to them and the Law of Acquisitions, Leases and Services of the Public Sector are amended, so that these may not be applicable to procurement procedures made by PEMEX. Agreements entered prior to this law, will continue with the same legal regime until their conclusion.
Relevant Aspects of the Law Pemex will continue to be 100% owned by the Mexican State. PEMEX is given budgetary autonomy and a special debt regime is created. In addition its disputes will now be resolved in accordance with commercial and civil law.
The Board of Directors shall be comprised of five representatives of the Federal Executive Branch of Government and five independent members who are to be ratified by Senate. The CEO and all Board Members will be proposed by the Mexican President. Until the Board of Directors issues a new corporate structure, the PEMEX subsidiaries (PEMEX Exploracion y Produccion,
PEMEX Gas y Petroquimica Basica, PEMEX Petroquimica and PEMEX Refinacion) will continue with their regular operations.
The guidelines to be issued by the Board of Directors will contain the rules for procurements made by PEMEX as a State Productive Company, following the principles of transparency and equality.
ConclusionPEMEX will remain performing all its current activities. New legislation grants special emphasis to (i) the development of new technologies, (ii) the partnership opportunity with third parties and (iii) a better corporate structure to be able to compete with the oil and gas companies that will begin operations in Mexico in the near future.
We will be happy to answer any questions related to the content of the PEMEX Law
ContactsBenjamin Torres Barron Jorge Guadarrama Yañez Luis Carbajo Martinez Carlos Alberto Linares-Garcia Hector Reyes Freaner Jose M. Larroque Federico Ruanova Guinea Juan Carlos Valles Zavala Eduardo Romero Ramos Alejandro Sepulveda Gaspar Gutierrez Centeno
Juan Bernardo Garcia Garza Jorge L. Ruiz Fabian Monsalve Agraz Reynaldo Vizcarra Mendez Edmundo Elias Fernandez Manuel Padron Castillo Adriana Ibarra Fernandez
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