Mexico Introduces Much Anticipated Secondary Legislation for Energy Reform

May 1, 2014

Reading Time : 2 min

The secondary legislation introduces or reforms 21 laws. These reforms are grouped into nine categories:

1 . Draft decree on the Hydrocarbons Law, with amendments to the Foreign Investment Law, Mining Law and Public Private Partnerships.
2. Draft decree on the Electricity Industry Act.
3. Draft decree on Coordinated Regulatory Bodies in energy and amendments to Federal Public Administration Laws.
4. Draft decree on the PEMEX Law and CFE Law, and amendments to the Public Entities Law, Acquisitions Law, Public Sector Leases and Services Law, and Public Works Act.
5. Draft decree on the Geothermal Energy Act, with amendments to the National Water Law.
6. Draft decree on the Law on Hydrocarbons Revenue.
7. Draft decree on the Mexican Petroleum Fund for Stabilization and Development.
8. Draft decree amending various provisions of the federal budget and tax laws.

Some highlights of the legislation for the Upstream Sector include:

  • Exploration and extraction contracts that can be entered into with PEMEX or others that can be issued by an auction process. Such agreements can be terminated for material breach, but will be governed by arbitration under Mexican law.
  • PEMEX is allowed to be given direct assignment of oil and gas blocks for ‘strategic projects’. Further, laws require PEMEX to receive least a 20 percent participating interest in trans-boundary oil and gas projects. Unlike the Brazilian pre-salt model, however, PEMEX will not have to be the operator and will merely participate. Further, such trans-boundary fields will be operated in accordance with international treaties.
  • Powers, rights and responsibilities are set forth for SENER, SHCP and the CNH.

Some highlights of the legislation for the midstream sector include the following:

  • Open access for the natural gas market, with open seasons to be held for transportation, subject to certification and regulations issued by the CRE. Pipeline owners are not allowed to participate in marketing hydrocarbons, however.  Rules are introduced to reduce market concentration of pipeline and marketing capacity over five and ten-year periods.
  • A new entity CENAGAS will receive PEMEX pipeline infrastructure and initiate capacity reservation contracts with PEMEX.

Some highlights for the downstream sector include:

  • Gradual opening of the diesel and gasoline sector, with maximum price controls in place until 2019 and market pricing beginning in 2020.
  • PEMEX will be the exclusive importer of gasoline until 2018.

Some highlights for the power sector include:

  • Barriers of entry reduced for new investment in clean energy and accelerating the decommissioning of older power plants.
  • Generators can enter into bilateral contracts and sell power to the wholesale electricity market.
  • Nuclear power generation is reserved for the state.
  • CFE is to compete with the market on equal terms.

While there are some of us that firmly believed Mexico would open up its energy sector eventually, and that the current administration had the will to push reforms into economic reality, the general consensus has been to the contrary. Certainly, there will be growing pains as regulatory bodies within Mexico assume their responsibilities over this new regime. However, with the magnitude of these reforms and the potential revolutionary impact it will have on the Mexican economy, we expect the government to continue to press forward, learning from not only their mistakes, but also lessons learned in other parts of the world where energy reforms have been implemented.

As people in Mexico prepare to commemorate the Battle of Puebla, May 5 (Cinco de Mayo for those not familiar with the holiday) can also mark the beginning of a new era of freedom and prosperity founded on open energy markets and competition.

Share This Insight

Previous Entries

Speaking Energy

October 24, 2025

On October 21, 2025, the U.S. Department of Energy (DOE) issued a final order (DOE/FECM Order No. 5264-A1) granting Venture Global CP2 LNG, LLC long-term authorization to export up to 1,446 billion cubic feet per year of domestically produced liquefied natural gas (LNG) from its Louisiana facility to countries without a free trade agreement with the United States (Non-FTA Countries). The final order follows a March 2025 Conditional Order,2 which issued while DOE was still completing its review of the agency’s 2024 LNG Export Study.3 The final order confirms that the project’s export volume and term authorization (through December 31, 2050) are unchanged, but provides for a three-year “make-up period” to allow export of any approved volume not shipped during the original term.

...

Read More

Speaking Energy

October 9, 2025

On October 1, 2025, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order No. 914 amending certain Commission regulations to incorporate a conditional sunset date in compliance with the Trump administration’s April 2025 Executive Order, “Zero-Based Regulatory Budgeting to Unleash American Energy” (the EO).

...

Read More

Speaking Energy

October 8, 2025

Akin is pleased to serve as a gold sponsor for Infocast’s Energy Independence Summit in Houston, October 21-23. Energy partner Charlie Ofner will moderate the Macroeconomics of Domestic Energy Independence panel, projects & energy transition partner Shariff Barakat will lead Opportunities in US Manufacturing: How Big, How Fast, How FEOC?, and counsel Taha Qureshi will guide the discussion on Cornerstones for Energy Independence: Investing in Grid Security & Cybersecurity.

...

Read More

Speaking Energy

October 6, 2025

As of October 6, 2025, the Federal Energy Regulatory Commission (FERC) continues to operate despite the lapse in appropriations that resulted in a government shutdown on October 1, 2025. While FERC receives appropriations from Congress, it primarily is self-funded through fees and charges obtained from the industries it regulates, offsetting its total costs. Hence, during prior government shutdowns in 2018 and 2013, the agency was able to continue operations. However, FERC published a plan for operating in the event of a lapse in appropriations on September 30, 2025, available here

...

Read More

Speaking Energy

September 8, 2025

On September 4, 2025, the Senate Energy and Natural Resources Committee convened a hearing to consider the nominations of Laura Swett and David LaCerte to serve as commissioners at the Federal Energy Regulatory Commission (FERC or Commission). Swett is a former FERC Staff that served as legal and policy advisor to former FERC Chairman Kevin McIntyre and Commission Bernard McNamee. LaCerte is an attorney in private practice that previously held positions at the Chemical Safety and Hazard Investigation Board and the Louisiana Department of Veterans Affairs.

...

Read More

Speaking Energy

September 9, 2025

On August 29, 2025, Christopher Wright, the Secretary of the U.S. Department of Energy (DOE) submitted a proposal to the Federal Energy Regulatory Commission (FERC) under section 403 of the Department of Energy Organization Act (DOE Organization Act), asking that FERC terminate its long-running proceeding in Docket No. PL18-1, which addresses proposed updates to its policy statement on the Certification of New Interstate Natural Gas Facilities. The docket resulted in a draft policy statement that has never been finalized, nor relied upon by FERC in a published order, but would require FERC to consider environmental impacts and potential mitigation prior to making a public interest determination under the Natural Gas Act (NGA). The Secretary asks FERC to rescind the draft policy statement in its entirety to remove any uncertainty in gas infrastructure development. Rescission would require FERC to initiate a new docket and develop a new record should it want to reinitiate similar policy changes in the future.

...

Read More

Speaking Energy

August 15, 2025

On August 8, 2025, the Federal Energy Regulatory Commission (FERC) issued an enforcement order in Skye MS, LLC (Skye) and levied a $45,000 civil penalty on an intrastate pipeline operator in Mississippi, resolving an investigation into the operator’s violations of section 311 (Section 311) of the Natural Gas Policy Act (NGPA). FERC faulted the operator for providing a Section 311 transportation service without timely filing a Statement of Operating Conditions (SOC) and obtaining FERC’s approval for the transportation rates. Section 311 permits intrastate pipelines to transport interstate gas “on behalf of” interstate pipelines without becoming subject to FERC’s more extensive Natural Gas Act (NGA) jurisdiction, but requires the intrastate pipeline to have an SOC stating the rates and terms and conditions of service on file with FERC within 30 days of providing the interstate service. Under the NGPA, Section 311 rates must be “fair and equitable” and approved by FERC. In Skye, FERC stated that the operator began providing Section 311 service on certain pipeline segments in Mississippi in May 2023, following their acquisition from another Section 311 operator, but did not file an SOC with FERC until April 2025. The order ties the penalty to the approximately two-year delay between commencement of the Section 311 service and the SOC filing date. The pipeline operator was also ordered to provide an annual compliance report and to abide by additional verification requirements related to the filing of its FERC Form No. 549D, the Quarterly Transportation & Storage Report for Intrastate Natural Gas and Hinshaw Pipelines.

...

Read More

Speaking Energy

August 6, 2025

In Sierra Club v. FERC, No. 24-1199 (D.C. Cir. Aug. 1, 2025), the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) upheld the Federal Energy Regulatory Commission’s (FERC) approval of a 1,000-foot natural gas pipeline segment crossing the United States-Mexico border (the Border Pipeline) under section 3 of the Natural Gas Act (NGA), rejecting environmental groups’ challenges that FERC improperly limited its analysis under both the NGA and the National Environmental Policy Act (NEPA), as related to a 155-mile intrastate “Connector Pipeline” constructed upstream of the Border Pipeline in Texas.

...

Read More

© 2025 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.