In This Issue:

- Introduction

- A Monumental Constitutional Amendment

- Understanding the New Risk Contracts

- Navigating the Regulatory Environment

- Investment Opportunities:

..Understanding Round Zero

..Farm Outs

..New Fields and Reservoirs

..Timeline

- Conclusion

- Appendix A: Geographic Area and Breakdown of Resources for Round Zero

- Appendix B: Description of Farm Out Fields

- Appendix C: Geographic Area and Breakdown of Resources for Round One

- Notes

- Excerpt from Introduction:

The scope of Mexico’s 2013–14 energy reform is unprecedented. It touches legal, financial and operational aspects of upstream, midstream and downstream activities for the oil and gas sector. Likewise, it significantly overhauls the institutional scaffolding surrounding the operation and regulation of electricity generation, distribution, transmission and retail. As a result, the Mexican energy industry will move from being vertically integrated, commanded through state entities and rather closed to foreign investment to being an industry that will be governed by principles of competition, and where foreign capital will not only be welcomed but encouraged—even if the state, and the state-owned enterprises, will continue to play a leading role.

The reform is the culmination of a long and complex legislative process to dramatically modify the policy framework in which the country’s state-owned energy sector has operated for decades. The process began in 2013 with the presentation, discussion and eventual passage of a constitutional amendment to lift most of the restrictions on private investment, as well as introduce new institutions and legal definitions to create an improved regulatory and operational framework for the sector. The amendment was signed into law on Dec. 20, 2013. Subsequently came the implementing (secondary) legislation, a massive set of legislative changes to 21 laws (nine of them new) spelling out the details of the institutional overhaul. These legislative packages were signed into law by President Enrique Peña Nieto on Aug. 11, 2014.