Decree to amend the Mexican Hydrocarbons Law

On May 4, the decree amending the Mexican Hydrocarbons Law (the "Decree") was published in the Federal Official Gazette.

The Decree involves modifications to Article 59 Bis proposed in the initiative of the President of Mexico (read further information on the President of Mexico's initiative) and the inclusion of an additional transitory provision. The amendments to Article 59 Bis state that the suspension of permits provided for in the Hydrocarbons Law (treatment and refining of oil; processing of natural gas; export and import of hydrocarbons and petroleum products and transport; storage; distribution; compression; liquefaction; decompression; regasification; commercialization; and sale to the public of hydrocarbons, petroleum products or petrochemicals) will require prior notification to the permit holder, indicating the causes and reasons motivating the suspension and the effects that could occur in the event that the activities covered by the permit continue, and provide a period of 15 (fifteen) calendar days for the permit holder to submit evidence and allegations as deemed appropriate. If at the end of the suspension period, the permit holder is not in a position to continue with its obligations, the permit will be revoked.

The added transitory provision aims to give authority to the Energy Regulatory Commission ("CRE") and the Tax Administration Service, within the scope of their competencies, to verify compliance with the provisions on the measurement of hydrocarbons, petroleum products, and petrochemicals.

On the other hand, on April 29, the Senate approved an amendment to the Thirteenth Transitory Provision of the Hydrocarbons Law to repeal the authority granted to the CRE to subject first‑hand sales of hydrocarbons, petroleum products and petrochemicals, and the commercialization activities undertaken by persons under the control of Petróleos Mexicanos, to the principles of asymmetric regulation. The bill was sent to the President of Mexico for its constitutional effects; thus, it is expected that the bill be published in the Federal Official Gazette in the near future.