Peña Nieto starts debate on Energy Reform in Mexico
Today, Mexican President Enrique Peña Nieto officially presented its proposal to reform energy sector (oil and electricity). Here is a quick preview of the hard debate to come:
- Constitutional reform will allow production sharing agreement with private companies.
- There will be a new tax regime of PEMEX. Currently PEMEX is taxed with 70% over profits.
- PEMEX will be compacted. It will go from 5 bodies to 2 Exploration and Production; and Industrial Transformation.
- There will be more transparency in PEMEX management.
- “National Content” rules will apply for suppliers and infrastructure constructors. Should Mexican subsidiaries from Foreign Companies are included? Are there caps?
- Private companies can generate electricity under better business structures. Currently, generation is allowed but has limitations.
- State shall keep exclusivity over the National Electric System (Grid) for transmission and distribution, and for guaranteeing access to producers.
- Comisión Federal de la Electricidad (CFE) gets more operational flexibility.
- Energy Regulator (CRE) gets more authority on planning and directing energy sector.
- Reform promotes clean energies.
Peña Nieto appears to have enough support to pass this reform on Congress. Let´s follow this Bill.