ENERGY REFORM TIMELINE OF RELEVANT DATES August 15, 2014 On August 11, 2014 the decrees were issued by the Federal Executive Branch that will implement at the federal law level the reform of the Political Constitution of the United Mexican States in energy matters. In addition to the federal secondary legislation issued on August 11, 2014, further regulatory instruments must be issued in order to implement the provisions of the various federal laws issued and amended (including regulations that the Federal Executive Branch will have to issue in its regulatory capacity granted in section I of article 89 of the Constitution, as well as other regulatory instruments that will specify the application of the laws, such as directives, Official Mexican Standards, general conditions, operating rules and model contracts, among others). There will also be various institutions that will implement the different regulatory instruments applicable to the energy sector and carry out the different procedures and actions intended to implement the reform. Below you will find a timeline with the relevant dates set forth in the reform 1 : AUGUST 2014 On August 13, 2014 the Ministry of Energy ( SENER ) presented the results of the request made by Pemex in relation to Round Zero. The Federal Electricity Commission ( CFE ) must provide to the National Energy Control Center ( CENACE ) the complete files related to the interconnection processes of power stations and connection of load centers. 1 It is important to mention that in the act issuing the energy reform, on August 11, 2014, the Federal Executive Branch announced that several dates would be changed, in order to speed up the process.
SEPTEMBER 2014 The Federal Executive Branch must include in the proposal of the Federal Revenue Law and the Federal Expenditures Budget, the new provisions on the public treasury and fiscal coordination and oil and gas fees and taxes. The National Water Commission must deliver the files of the geothermal energy fields to SENER. OCTOBER 2014 Based on the announcement of the Federal Executive Branch in the act of issuing the reform, it is estimated that the decree restructuring the Mexican Petroleum Institute will be issued. Based on the announcement of the Federal Executive Branch in the act of issuing the reform, it is estimated that the guidelines for the clean energy certificates will be issued. NOVEMBER 2014 Deadline for the Federal Executive Branch to send to the Senate its proposal for the appointment of the four independent members of the Mexican Petroleum Fund for Stabilization and Development ( Mexican Petroleum Fund ). Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, this could occur in August 2014. Deadline for the Federal Executive Branch to send to the Senate the proposals for the composition of the Board of Directors of Petróleos Mexicanos ( Pemex ) and CFE. Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, this could occur in August 2014. Deadline for the Ministry of Finance and Public Credit ( SHCP ) and the Bank of Mexico to create the trust called the Mexican Petroleum Fund. Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, this could occur in September 2014. Deadline for the mining concession holders to request the direct award for the exploration and extraction of gas. Deadline for the Federal Executive Branch to designate the new director of the National Industrial Security and Environmental Protection Agency of the Oil and Gas Sector. According to the Commissioner-President of the CNH, the preliminary terms will be issued for bidding for those fields that have not been granted to Pemex to carry out exploitation and extraction activities, as well as the fiscal model and the mode of contracting for the corresponding bidding.
DECEMBER 2014 The Federal Executive Branch must issue the regulation of the Geothermal Energy Law. Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, this could occur in October 2014. CFE must present the request for the zones in which it intends to continue pursuing geothermal projects, in a process similar to the Round Zero of Pemex. The general directors of Pemex and CFE must appoint the head of their respective Internal Audit Departments. The Boards of Directors of Pemex and CFE, respectively, must present a plan on the restructuring of those bodies, in relation to the purpose their affiliates will have. JANUARY 2015 On January 1, the rules of Income Derived from Permits for Pemex will enter into force. On January 1, the Mexican Petroleum Fund will begin to operate. On January 1, SENER and the Energy Regulatory Commission ( CRE ) may grant permits and authorizations for new activities such as the treatment, refining, processing, compression, liquefaction, decompression and re-gasification of oil and gas. The tax regime of Pemex will change; the States will be entitled to the delivery of estimated funds of 11,800 million pesos. FEBRUARY 2015 Deadline for the issuance of the decree creating the National Center for Control of Natural Gas and the CENACE. Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, the creation of these bodies could occur in August 2014. Deadline for the Federal Executive Branch to send to the Senate its proposal for the appointment of the new commissioners of the National Oil and Gas Commission ( CNH ) and the CRE. Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, this could occur in August 2014. The Federal Executive Branch must issue the regulation of the National Industrial Security and Environmental Protection Agency of the Oil and Gas Sector.
Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, this could occur in October 2014. Deadline for the Federal Executive Branch to issue the regulation of the Oil and Gas Law. Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, this could occur in October 2014. Deadline for CRE and CNH to issue their internal regulations. Nevertheless, based on the announcement of the Federal Executive Branch in the act of issuing the reform, this could occur in October 2014. Deadline for the Federal Executive Branch to issue the provisions to regulate the sale of natural gas, liquid petroleum gas and gasoline, and their transport by pipeline and their sale to the public, respectively. The Ministry of Economy must present its first diagnosis regarding the degree of national content that the projects of the sector must comply with, which should be implemented in bidding procedures related to activities of exploration and extraction of oil and gas for the corresponding year. According to the Commissioner-President of the CNH, the terms of the bidding for those fields that have not been granted to Pemex to carry out exploitation and extraction activities will be issued. MARCH 2015 The Boards of Directors of Pemex and CFE must approve the plan for their new structure, presented by the general director. APRIL 2015 The SENER must resolve the requests by CFE with respect to the geothermal projects that CFE wishes to develop. Subsequently, bidding procedures will be carried out on the zones that have not been granted to CFE or on those that CFE has not requested. MAY 2015 CENACE should receive the economic and material resources for the control of the National Electric System. CRE must issue the model contracts referred to in the Electric Industry Law.
AUGUST 2015 The unions of Pemex and CFE must come to an agreement on the restructuring of their labor liabilities, so that the Federal Government can assume part of them. Similarly, they must renegotiate the terms of the corresponding collective bargaining agreement. SEPTEMBER 2015 Deadline for CRE to issue the general conditions for open access applicable to the infrastructure for the transportation, storage and distribution of petroleum products. DECEMBER 2015 Deadline for the National Industrial Security and Environmental Protection Agency of the Oil and Gas Sector to issue the provisions governing the facilities for the sale, transport, storage and distribution of petroleum products. Deadline for Pemex and CFE to be transformed into State production companies. AUGUST 2016 Deadline for Pemex to transfer to CNH all the information related to oil and gas activities. SEPTEMBER 2016 Deadline for beginning the operations of the National Center for Oil and Gas Information. DECEMBER 2016 Deadline for the Federal Executive Government to implement the aid program focused on liquid petroleum gas commercialization activities. JANUARY 2017 The monthly gasoline price increases, under SHCP, should conclude, a new model for controlling the price of gasoline entering into effect which will contemplate the maximum price of gasoline to the public, the expected inflation and the volatility of international fuel prices. Private parties may begin gasoline importing activities. The price of liquid petroleum gas will be deregulated.
JANUARY 2018 The delivery of contracts for the sale of gasoline by the private sector will commence. Gasoline prices will be determined based on the market. If you need additional information please contact Mr. Juan Carlos Machorro jmachorro@s-s.mx (+52 55) 5279-5463, partner in charge of the energy department of the firm, or the partner responsible for your matters or one of the attorneys mentioned below. Mexico Office: Monterrey Office: Tijuana Office: Querétaro Office: Mr. Juan Carlos Machorro G., jmachorro@s-s.mx (Partner) Mr. Antonio Massieu A., amassieu@s-s.mx (Associate) Ms. Mónica Santoyo G., msantoyo@s-s.mx (Associate) Ms. Cecilia Sarabia., csarabia@s-s.mx (Associate) Tel: (+52 55) 5279-5400 Mr.. Jorge Barrero S., jbarrero@s-s.mx (Partner) Tel: (+52 81) 8133-6000 Mr. Aarón Levet V., alevet@s-s.mx (Partner) Tel: (+52 664) 633-7070 Mr. José Ramón Ayala A., jayala@s-s.mx (Partner) Tel: (+52 442) 290-0290