Energy & Natural Resources, Mexico updates

Enel enters Mexican energy sector
  • Mexico
  • November 13 2017

Italian energy company Enel Green Power recently launched a qualified energy supplier subsidiary in Mexico, through which it intends to acquire at least 150 large customers. Enel plans to make a substantial bid to commercialise electric power, clean energy certificates and energy solutions for commercial and industrial users. This type of private investment is a clear example of how the Mexican energy reform has led to the emergence of new players that were previously unable to participate in this sector.

CNH announces tender for oil marketing services
  • Mexico
  • November 06 2017

The National Hydrocarbons Commission (CNH) recently announced the tender for the commercialisation of hydrocarbons that the state obtains as consideration in exploration and extraction contracts. The CNH indicated that the tendered services will consist of the company that wins the tender selling the hydrocarbons when they are delivered by the private company that extracted them. This action is another example of the new business opportunities that the recent energy reform has introduced.

Legal servitude of hydrocarbons
  • Mexico
  • July 17 2017

Following the latest energy reform and the enactment of the new Hydrocarbons Law in 2014, a new legal concept regarding the legal servitude of hydrocarbons has been introduced. This concept aims to replace direct expropriation by giving landlords more options when negotiating the ownership of properties used by public utilities in the acquisition of land needed for hydrocarbon activities.

Oil tender rounds consolidate Mexico as one of world's most attractive investment destinations
  • Mexico
  • May 29 2017

According to its recent press release, the Ministry of Energy, in conjunction with the National Hydrocarbons Commission, plans to increase substantially the number of areas offered in future oil tenders. This will increase national production of oil and gas, as well as future reserves. In addition, the energy secretary has stated that it will help to consolidate Mexico as one of the world's most attractive investment destinations in the hydrocarbons field.

Social management of energy projects in Mexico: international law and human rights
  • Mexico
  • May 22 2017

The execution of major energy projects has been affected by social opposition from various communities, including individual landowners and indigenous communities, among others. The magnitude of this problem is best addressed from a human rights perspective, as the complex structure of international and regional organisations of which Mexico is a member has resulted in a vast number of international treaties relating to the human rights of communities affected by energy projects.

Shale resource extraction rules finally in operation
  • Mexico
  • May 15 2017

The Environmental and Energy Security Agency recently published environmental rules that aim to kickstart shale hydrocarbon extraction in Mexico. The General Administrative Provisions that establish the Guidelines on Industrial Safety, Operational Safety and Environmental Protection for Hydrocarbon Exploration and Extraction Activities in Non-conventional Land Deposits require all operators, as of September 2017, to prove that they have undertaken various planning and activities.

Private equity funds seek profitable projects
  • Mexico
  • May 08 2017

Private equity funds are looking to invest in profitable energy projects, including alternative and environmentally friendly schemes. To date, a reported $6 billion has been invested, with private equity funds having a further $8 billion available. For investors, opportunities lie not only in big energy projects, but also associated development projects, such as the construction of infrastructure and the development of services for surrounding communities.

Fuel market liberalisation continues
  • Mexico
  • May 01 2017

As of April 19 2017, the Energy Regulatory Commission has been accepting bid proposals from private companies for Pemex's infrastructure regarding the operation and delivery of fuel in the states of Coahuila, Nuevo Leon, Tamaulipas and Durango. This process is the first step towards achieving an open market with regard to petrol and diesel prices in these states.

SENER issues CEL requirements for 2019 to 2022
  • Mexico
  • April 17 2017

The Ministry of Energy recently published the Notice Announcing the Requirements for the Acquisition of Certificates of Clean Energies in 2019, 2020, 2021 and 2022 in the Official Gazette. The notice establishes the percentage of electricity consumption by companies and users which must come from clean energy sources in each of the relevant years and has given clean energy market participants more information with which to plan their clean energy certificate initiatives.

Acciona Energia starts energy transition in Mexico
  • Mexico
  • April 03 2017

According to news reports, Acciona Energia is developing its fifth wind farm in Mexico. The project is a clear example of Mexico's commitment to achieving its clean energy goals. It is also a result of the General Law on Climate Change 2012, which included a commitment to the generation of clean energy through a series of provisions concerning environmental protection, sustainable development and the preservation and restoration of ecological balance.

Guidelines and model contracts issued for exploration and extraction of hydrocarbons and transportation via pipelines
  • Mexico
  • March 13 2017

The agreement containing the guidelines and model contracts regarding the use, enjoyment and acquisition of land, goods and rights for the exploration and extraction of hydrocarbons and their transportation via pipelines was recently published in the Federal Official Gazette. The agreement establishes the minimum requirements for such contracts with regard to payment, other terms and conditions (including rights and obligations) and dispute resolution mechanisms.

Is arbitration possible under deep water block licensing contracts?
  • Mexico
  • February 27 2017

In December 2015 the Ministry of Energy published the bidding guidelines for the fourth phase of the first round of tendering for the exploration and extraction of hydrocarbons in deep water blocks, which changed the prior model contract from a production sharing contract to a licensing contract. Following the recent bidding process, questions have arisen as to whether investors can settle disputes regarding termination of a contract for administrative reasons by way of arbitration.

How will Mexico negotiate trade with Trump?
  • Mexico
  • February 13 2017

Following President Trump's election, Mexico is eager to enter into negotiations with the United States due to the uncertainty around the North American Free Trade Agreement (NAFTA). During the drafting of NAFTA's energy chapter, Mexico's commitment to the agreement's energy matters was uncertain, and no formal intention to renegotiate or reform Chapter 6 of NAFTA has been signalled following Mexico's energy reform.

Gasoline liberalisation: an opportunity for foreign investment
  • Mexico
  • February 06 2017

Public gasoline and diesel prices for 2017 and 2018 will be set in accordance with a flexible schedule issued by the Regulatory Commission of Energy. The commission's aim is to deregulate gas and diesel prices in a gradual and organised manner, in order to ensure that they reflect actual delivery costs. The objective of the schedule is to promote the development of infrastructure and reduce costs through the entry of new economic agents in the Mexican market.

Citibanamex declares surplus more likely following liberalisation of gasoline prices
  • Mexico
  • January 30 2017

Citibanamex recently stated that the liberalisation of gasoline prices in Mexico has increased the probability of achieving a primary surplus in 2017. Citibanamex also stated that, following the liberalisation, Mexico's economy will become a free market in which retail prices will reflect demand and supply, thus encouraging investment in the sector. In the long-term, this is arguably a positive measure for everyone.

Mexico City to get new thermal solid waste treatment plant
  • Mexico
  • January 23 2017

Mexico City is one of the highest solid waste-generating cities worldwide. As such, the Mexico City government recently published public tender guidelines for the design, construction and operation of a thermal solid waste treatment plant, which will generate and provide electric power to the city's subway system. The plant will reduce fossil fuels and directly contribute to the city's waste management transportation issue, which will result in a more sustainable city and boost energy transition.

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