Energy & Natural Resources, Hogan Lovells BSTL SC updates

Mexico

Contributed by Hogan Lovells BSTL SC
CRE endorses retailers' use of benefit and loyalty programmes
  • Mexico
  • 14 January 2019

The Energy Regulatory Commission recently confirmed that certain business models used by retailers of refined products (eg, diesel and gasoline) are valid and stimulate competition in the market to the benefit of customers. As such, retailers can develop loyalty programmes based on bonuses, credits, subscriptions, memberships or exclusive offers, among other things, to be offered by various petrol stations. However, these programmes must be made available to all customers and cannot be discriminatory.

New president bans fracking
  • Mexico
  • 24 December 2018

In his inaugural address, President Andrés Manuel López Obrador confirmed that fracking will be prohibited in Mexico. As Mexico is highly dependent on the natural gas potential of basins located in the northern part of the country, this prohibition will deny it access to resources which it needs to achieve energy sufficiency. Thus, both the executive and legislative branches should instead consider appropriate regulation (rather than a simple ban) that allows for the rational use of oil and gas resources.

New administration confirms suspension of bidding rounds
  • Mexico
  • 17 December 2018

President Andrés Manuel López Obrador recently confirmed that bidding rounds organised by the National Hydrocarbons Commission will be suspended for at least three years until the contracts awarded during the previous administration result in effective investment and, most importantly, new oil and gas production. The new president has further affirmed that production will be increased through additional investment in Pemex, which will ultimately result in the national oil company's rescue.

Energy regulatory bodies to lose independence under new government
  • Mexico
  • 12 November 2018

A member of the House of Representatives recently introduced a legislative proposal that seeks to amend the Organic Law of the Federal Public Administration. The proposed reform aims to grant the central government significantly more control over the public administration, including with regard to the energy sector. Essentially, the National Hydrocarbons Commission and the Energy Regulatory Commission will no longer be independent from a technical and operational standpoint.

Will Mexico suspend bidding rounds and farm-outs?
  • Mexico
  • 15 October 2018

The 2013 energy reform significantly opened up the energy sector to private participation, thus ending the state's decades-long monopoly. However, the newly elected administration has pledged to revisit the reform and grant the state greater control of the sector. Although there have been mixed messages in this regard, the new administration has confirmed that the third bidding round for granting exploration and production licences and share production agreements will be suspended indefinitely.


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