Mexico Energy Reform From Regulatory Independence to Centralised Oversight
At A Glance
THE CHANGES
The following changes represent a substantial departure of the current system:
Mexico has announced a proposed series of reforms to its energy sector (the “Reform”). The Reform includes the National Energy Commission Law, which establishes a new National Energy Commission (Comisión Nacional de Energía, “CNE”), that will be controlled by the Mexican executive branch through the Ministry of Energy. The CNE will replace the Energy Regulatory Commission (“CRE”) and National Hydrocarbons Commission (“CNH”) as regulators of the energy sector and the new law will repeal the Law of Coordinated Regulatory Bodies in Energy Matters (Ley de los Órganos Reguladores Coordinados en Materia Energética). The Reform will impact investors, as the energy sector in Mexico will no longer have independent regulators and the CNE will control permits, the supervision and enforcement of sanctions, and the issuance of new regulations applicable to power, oil and gas activities.
This note summarises: I. the regulatory framework; II. the rules after the Reform; and III. the impacts on international and domestic investors. Understanding the potential changes is important for planning and safeguarding interests across new and ongoing energy projects.