2013 Mexican energy reform. Constitutional amendments
The Mexican Energy Reform opens and allows participation
of private companies in hydrocarbon and electricity projects,
which prior to 2013 where completely banned to private investment
and where carried out only by the Mexican State.
Mexican government goal is to attract private companies to invest
in the Mexican energy industry.
As of today, Mexican government has already called for Round
One, the first one out of a series of Rounds aimed to attract private
investments in hydrocarbon exploration and extraction matters.
Additionally, the National Power Control Center (CENACE) has call
for the first long term electric auction, which purpose is to award contracts
for the purchase and selling of power, cumulative electric power
and clean energy certificates.
Mexico´s potential. Oil and gas resources.
All tenders included so far in Round One have as main goal to attract
potential investors and increase oil production in 500 thousand barrels
for 2018 and 1 million barrels for 2025.
According to evaluations made, up to January 1, 2015, Mexican oil
resources that have not been discovered, but may be potentially recovered
are estimated in 112,834 MMbpce (billions barrels) of crude oil
equivalent, out of which 52,629 MMbpce (47%) are conventional resources
and 60,205 MMbpce (53%) are non-conventional resources.
» Exploration and Extraction Plan
The Plan contemplates an exploration
and extraction surface of
235, 070. 0 km2 and establishes
four bidding rounds for exploration
and extraction fields and
areas to be executed from 2015 -
2019 with an average of an equivalent
of 104,778.6 Billion Barrels
of Crude oil.
» Exploration & Extraction
Plan / Round One
• 109 exploration
blocks and 60
covering a surfac e
of 28,500 km2.
• Prospective resources
of an equivalent of
barrels of crude oil.
• Fourth tender
under process .
and Extraction Plan /
Round One / Fourth tender
• Ann ounc ed by CNH on
December 17, 2015.
• Includes 10
for offshore exploration
and extraction contrac
ts in deep waters.
• Prospective resources
of 10,537.3 billion
» Coming Rounds / Two, Three and Fourth
Three additional Rounds are pending to be called.
These Rounds will include total resources of approximately
34,693.3 billion barrels which will be
tendered as follows:
» PEMEX assignments
Petróleos Mexicanos (PEMEX) was given preference
over certain exploration and extraction fields
in which it had technical, performance and financial
skills for operation.
• 489 allocation’s
given to PEMEX.
• 20,589 billion barrels
of crude oil equiva lent
of 2P reserves.
• 23,447 billion barrels
of crude oil equiva lent
of prospective resources.
Hydrocarbon Law allows PEMEX to migrate
those assigned fields, prior approval of National
Hydrocarbons Commission (CNH), to the new exploration
and extraction contracts. In 2015, CNH
has already approved to migrate some developed
onshore and offshore fields with 2P reserves of approximately
2,211 billion barrels.
Additional undeveloped fields are expected to be
farmed out by PEMEX with 2P reserves of approximately
296 million barrels and 3P reserves of 1,007
CNH will publish an invitation to tender in which
private investors will be able to compete to associate
with PEMEX for those areas.
» Midstream and Downstream
Private investment will be required for: (i) storage
terminals; (ii) railroads lines; (iii) pipelines; (iv)
highways; (v) ports; (vi) service stations.
» Natural Gas / Current infrastructure
Natural gas demand has increased since 2004 and is
expected to reach 10,390.3 million of cubic feet per
day by 2029.
» Natural Gas / Transportation
and Storage System Plan
Which includes 12 different pipeline projects for
more than 5,150 km of gas pipelines and investments
of approximately 9,056 billion USD.
The above mentioned projects will be reflected as
follows once executed.
Additionally, 8 projects are to be executed by the
Federal Electricity Commission (CFE) in order to
supply natural gas to new power generation plants
in other Mexican regions.
A complete legal framework has
been issued and is fully in force
to strength the legal certainty
for companies so they might
come and participate in the
tender and auction procedures
Between 2004 - 2014 the gross consumption of electric
energy increased 2.9% while the forecast for the period
2015 - 2029 presents an annual increase of 3.5%.
Maximum demand forecast is expected to increase
for the period 2015 - 2029 in an annual rate
of 3.8%, meaning 69.846.9 MWh.
In order to attend national consumption and
the demand of electric energy the Federal Government
intends to expand the National Electric System
to meet a requirement of 59,985.6 MW for the
period 2015 - 2029 (56.9% with new projects).
In addition, the Federal Government expects to increase
the electric transmission system. Between 2015
- 2029 construction of 24,599 km of electric lines is expected
as well as 410 km of transmission works.
The electric sector prospective program contains
approximately 21 projects to be tendered between
2016 - 2019.
Mexico has a great potential for investment in the
oil, gas and electric energy industries having a considerable
amount of resources. Activities related to
the hydrocarbons and electric energy sectors have
been completely open for investment and private
participation. A complete legal framework has been
issued and is fully in force to strength the legal certainty
for companies so they might come and participate
in the tender and auction procedures.