Mexico’s Energy and Telecom Reforms Come Into Focus

July 24, 2014

07/24/14 By Dwight Dyer. Forbes

3601496501_9bc4193670The passage of President Enrique Peña Nieto’s reform agenda last year was a watershed moment for Mexico’s government, representing the most significant change to the country’s governance since the election of Vicente Fox in 2000 ended decades of single-party rule. Yet the true extent of the reforms remains very much unknown. Although the constitutional amendments passed last year represented agreements to reforms in principle, the nuts and bolts of the actual reform must still be hashed out in a wave of secondary legislation. As I’ve written here before, the devil is in the details.

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Mexico’s Oil And Gas Industry Is Open To Foreign Investment For The First Time In Over 75 Years

July 23, 2014

07/23/14 Business Insider

gas pipeline and gaugeMexico’s Senate has approved legislation to implement historic constitutional reform that would open the country’s oil and gas industry to foreign investment for the first time since 1938.

In an 85-26 vote, lawmakers passed the last of four packages of laws Monday to end the monopoly held by state oil company Pemex for 75 years in the exploration and exploitation of energy resources.

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Mexico’s CFE to tender $2.8 bln in power plant, pipeline projects

July 22, 2014

07/21/14 Reuters

gas pipeline and gaugeMexico’s national power company CFE said on Monday it will offer $2.8 billion in natural gas and electricity infrastructure project contracts by the end of this year aimed at boosting economic growth.

The projects include two combined-cycle power plants, two natural gas pipelines as well as an electricity transmission project, all located near Mexico’s northern border with the United States.

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Headlines from Mexico

July 21, 2014

07/21/14

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1. This weekend, the Senate approved changes to the regulatory framework of the Federal Commission of Electricity (CFE by its acronym in Spanish) and PEMEX as part of the new legislation of the Energy Reform. Among the main changes are the following: it provides technical, operational and managerial autonomy to both companies, thereby reducing the administrative burden to which they were subject. Furthermore, the labor rights of workers are protected and the unions are allowed to remain as key players in the decisions of both companies. Specifically for PEMEX, it facilitates the creation of various subsidiaries to operate a variety of hydrocarbon exploration and exploitation projects; meanwhile, authorizes the CFE to provide private firms access to the national transmission and distribution electric network.

This is the third set of changes approved by the Senate. The fourth and final set of legislative changes are expected to be discussed during this week. The changes are still pending discussion and approval in the lower house of the Mexican Congress.

Read more from Excelsior,Reforma,and La Jornada…

2. The Mexican Social Security Institute (IMSS for its acronym in Spanish) and the Institute for Social Security and Services for State Workers (ISSSTE for its acronym in Spanish) are facing budgetary pressures due to large pension obligations. According to the Ministry of Finance, over 50% of their annual expenditure goes directly to pension payments, which could threaten their financial viability in the long term according to experts. Several voices from the academic and private sectors have called to take action to address the problem of the national pension system. Several state and municipal governments are facing similar challenges.

Read more from El Universal…

3. Following a confrontation between residents and police in Puebla, one child died. On July 9th, there was a clash between residents of San Bernardino Chalchihuapan and state police in Atlixco-Puebla highway. Protesters blocked both directions of the road and were asking for the return of the Civil Registry Office to the municipal council.  Members of the state police forced them to leave, which led to a confrontation that resulted in four people arrested, 18 injured policemen and a seriously injured child, who later died at the hospital. Controversy surrounds the case: the boy’s mother accused the state police of hurting her son with a rubber bullet, while the state government blamed the protesters. The Secretary of Public Safety rejected the notion that the state police used rubber bullets in the confrontation. Puebla’s State Government requested the Attorney General’s Office to deal with the matter in order to determine responsibility for injuries to the minor.

Read more from Reforma…

 


Mexico liberalizes electricity generation

July 21, 2014

07/21/14 Deutsche Welle

Energy -electricity_transmission_linesMexico’s Senate has passed a law that will allow private power generators to sell electricity directly to users. It’s another step in a major reform and privatization of the country’s energy sectors.

Mexico’s Senate voted 88 to 26 on Sunday (20.7.2014) in favor of a new Electricity Industry Act, which will now move to the Chamber of Deputies, the lower house in Mexico’s parliament, for further legislative processing.

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Mexico’s Senate OKs fresh changes to Pemex, electrical utility

July 21, 2014

07/21/14 Reuters

energy - oil_rigMexico’s Senate passed two bills late on Sunday that set out modified structures for the country’s two state-owned energy companies, part of a sweeping reform that overhauls the oil, gas and electricity sectors.

The new laws that define the administration and new transparency measures for state-run oil company Pemex and national electricity utility CFE passed on a vote of 89 to 27.

 

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Mexico Senate Approves Energy Bill Opponents Denounce as Treason

July 18, 2014

07/18/14 Bloomberg

energy- oil pumps 2Mexico’s Senate approved additional legislation to help open the country’s energy sector to private companies for the first time in more than seven decades, a move decried as treasonous by opponents.

The Senate voted 90 to 28 today to approve a bill that sets a framework for oil and gas contracts for companies entering the country such as Chevron Corp. (CVX) and Exxon Mobil Corp. (XOM)The landmark legislation opens the state-run crude monopoly held by Petroleos Mexicanos since 1938. Three other proposals that will open the electricity sector and set guidelines for state-owned companies and their employees will be debated today and over the weekend.

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Mexico to open oil and gas to private sector

July 18, 2014

07/18/14 Deutsche Welle

energy - oil pumpsMexico’s Senate voted 90-28 on Wednesday (17.7.2014) to approve the core elements of a bill setting out the regulatory framework for opening the country’s oil and gas sector to private investment, according to reports by Reuters and the leading Mexican daily El Universal.

Under the new Hydrocarbons Law, a centerpiece of President Enrique Pena Nieto’s economic reform agenda, production and exploration for oil and gas by private companies will once again be permitted, after a 75-year hiatus. The government hopes that opening the hydrocarbons sector to private investment will reverse the past decade’s pattern of falling oil and gas output.

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Mexico’s Proposed Energy Laws Market Positive, Analysts Say

July 17, 2014

07/17/14 Bloomberg

energy -wind_energyThe energy legislation draft approved by Mexican senate committees yesterday is favorable given low national content requirements and short-term economic growth prospects, according to analysts.

The proposed secondary energy laws call for a 25 percent national content minimum for incoming companies by 2015 that will increase to 35 percent by 2025. The minimum requirements for national content, which is the amount of obligatory Mexican supplies in each new energy project, “won’t bother anybody” and are reasonable compared to other countries, according to Steve Otillar, partner at Akin Gump Strauss Hauer & Feld LLP.

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Mexico Senate Committees Send Energy Legislation to Full Chamber

July 16, 2014

07/15/14 Bloomberg

Mexican_SenateMexican Senate committees today advanced four bills implementing last year’s energy opening to the full chamber, with a vote possible as soon as July 17.

The energy and primary legislative studies committees voted to advance the laws with backing from the ruling Institutional Revolutionary Party, or PRI, and the opposition National Action Party, or PAN. PAN changes incorporated in the bills include strengthening the rights of landowners against expropriation by the government and Senate ratification of board members for state-owned oil producer Petroleos Mexicanos, or Pemex, PAN Senator Jorge Luis Lavalle said in a phone interview.

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