Amendment to the Hydrocarbons Law and resolution that eliminates the asymmetric regulation applicable to Pemex

On May 19, 2021, the Mexican President Andrés Manuel López Obrador published in the Federal Official Gazette¹ the "Decree amending the thirteenth transitory article of the Hydrocarbons Law" (the "Reform"), in order to eliminate the asymmetric regulation applicable to Pemex (Petróleos Mexicanos).

The explanatory statement presented in the initiative of the Reform determines that the asymmetric regulation set forth in the thirteenth transitory article, in force since 2014, was intended to limit the dominant power of Pemex vis-à-vis different entities in order to encourage the participation of economic agents for the efficient and competitive development of the hydrocarbons sector. However, as stated in said explanatory statement, it is affirmed that, since there is already a greater participation of private economic agents in the sector, it is no longer justified to maintain the asymmetric regulation imposed by the Energy Regulatory Commission ("CRE") to Pemex.

Therefore, the Reform amends the thirteenth transitory article of the Hydrocarbons Law ("LH"), in order to:

1. Annul the power granted to CRE in order to subject Pemex to the principles of asymmetric regulation applicable to: (i) first-hand sales of Hydrocarbons, Petroleum Products or Petrochemicals and (ii) commercialization carried out by entities controlled by Pemex or its subsidiary bodies.
2. Determine that the sales carried out by Pemex, its subsidiary productive companies or a legal entity on behalf of the State will be considered as commercialization in terms of the LH, so the principles of generality and no undue discrimination set forth therein must be observed.

Transitory Provisions

In particular, the transitory articles of the Reform establish, among other aspects, that (i) all provisions that oppose the Reform are repealed and (ii) within 30 calendar days from the entry into force of the Reform, the CRE must nullify the general administrative provisions, resolutions and guidelines related to the imposition of asymmetric regulation principles on Pemex and its subsidiary agencies.
It should be noted that through the extraordinary meeting held on May 20, 2021, the CRE’s board of commissioners approved the resolution that complies with the third transitory article of the Reform (the "Resolution"). It was submitted to the National Commission of Regulatory Improvement, which approved the exemption of the Regulatory Impact Analysis of the Resolution. In this regard, on May 21, 2021, CRE published the Resolution in the DOF² in order to come into effect, and therefore, materialized what is referred in subsection (ii) of the preceding paragraph.

Individuals or entities whose rights would be affected by the Reform may obtain legal advice for taking appropriate legal actions.

Click here to download 'Amendment to the Hydrocarbons Law and resolution that eliminates the asymmetric regulation applicable to Pemex' PDF in Spanish.

_{1 The Reform may be found at: http://www.dof.gob.mx/nota_detalle.php?codigo=5618799&fecha=19/05/2021
2 The Resolution may be found at: http://www.dof.gob.mx/nota_detalle.php?codigo=5619073&fecha=21/05/2021}

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