Peña Nieto starts debate on Energy Reform in Mexico

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Yesterday, Mexican President Enrique Peña Nieto officially presented his proposal to reform the energy sector (oil and electricity). Here is a quick preview of the hard debate to come:

  1. Constitutional reform will allow production sharing agreement with private companies.
  2. There will be a new tax regime of PEMEX. Currently PEMEX is taxed with 70% over profits.
  3. PEMEX will be compacted. It will go from 5 bodies to 2 Exploration and Production; and Industrial Transformation.
  4. There will be more transparency in PEMEX management.
  5. “National Content” rules will apply for suppliers and infrastructure constructors. Should Mexican subsidiaries from Foreign Companies are included? Are there caps?
  6.  Private companies can generate electricity under better business structures. Currently, generation is allowed but has limitations.
  7. State shall keep exclusivity over the National Electric System  (Grid) for transmission and distribution, and for guaranteeing access to producers.
  8. Comisión Federal de la Electricidad (CFE) gets more operational flexibility.
  9. Energy Regulator (CRE) gets more authority on planning and directing energy sector.
  10. Reform promotes clean energies.

Peña Nieto appears to have enough support to pass this reform on Congress. Let´s follow this Bill.