President Enrique Peña Nieto received the “IHS Ceraweek Global Energy Lifetime Achievement Award” in the city of Houston, Texas, as recognition of the modernization Mexico has undergone as a result of Energy Reform.

"I receive this award on behalf of all Mexicans. The advances in energy you have highlighted today are not the result of the work of one man or even a single government; They are the result of the collective effort of an entire nation that is being transformed.” 

Structural reforms

Mexico had to promote sweeping changes to break down barriers, catch up and unleash its potential. The diagnosis of analysts and experts was clear: structural reforms were required in various priority sectors.

The Pact for Mexico was signed on the second day of the current administration. As  result of this and an intense legislative process, 13 transformative reforms were adopted, Including Energy Reform, the most important economic change in the past 50 years. This represents a paradigm shift in the way energy resources are obtained, transformed and exploited. 

As a result of this reform, the Mexican state retains ownership of sub-soil hydrocarbon resources while at the same time allowing private participation in the entire value chain in hydrocarbons and practically the entire electricity industry.

The design of this reform has been recognized for its breadth and depth, together with the surprising speed and professionalism of its implementation. Despite the complex international environment, Energy Reform is being adopted, successfully and more quickly than expected. 

Encouraging progress

In 2013, the Constitutional Reform was passed, followed by the Secondary Legislation in 2014.

As for the electricity sector, the Reform makes it possible to offer more competitive rates for industry, commerce and households.

January saw the start of the new Mexican Electricity Market, which permits free competition in the generation and sale of electricity.  

Now public and private companies, both domestic and foreign, have the ability to produce and sell energy. The fundamental principle of this new electricity market -in favor of consumers-is that the cheapest energy is dispatched first.

This opens up unprecedented opportunities for investing in the electricity sector. In the second quarter of this year, the Federal Electricity Commission will invite tenders for the first major transmission line, with private participation, as part of Energy Reform. 

This major infrastructure project will allow clean energy -wind and hydraulic- from the Isthmus of Tehuantepec, to flow and meet demand in the center of the country at a distance of 600 kilometers (372 miles). It will be the first line to be built in Mexico powered by high voltage direct current technology, with an estimated investment of 1.2 billion USD.

There is also a new Law on Energy Transition, which facilitates the incorporation of clean energy into the electricity generation matrix. As a result, the electricity generated from clean sources will account for 35% of total production in 2024, 40% in 2035 and 50% in 2050. 

In the hydrocarbon sector, Round Zero was held in 2014 and in 2015, the first three tenders for Round One took place, in keeping with the highest international standards of legal certainty and transparency.

Thirty contracts were allocated the same number of national and international companies, giving rise to a new oil industry in Mexico.

Three principles of the implementation of Energy Reform

FIRST. Regardless of what happens in the international environment, Mexico is proceeding with the implementation of Energy Reform. The government is committed to implementing Energy Reform to ensure its full, effective and timely implementation.

Despite low international oil prices, the world is trusting and investing in Mexico. All the planned bids for contracts for 2015 were held, and increasingly successfully.

SECOND. The Mexican government will continue to implement Energy Reform, based on the highest standards of transparency and accountability.

THIRD. Efforts continue to ensure that the Mexican energy sector is characterized by quality regulatory and contractual practices, to give full certainty to investors, with a stable, competitive fiscal framework.

The current rate of bidding for contracts for hydrocarbon extraction will be maintained. In early December, the fourth bidding of Round One will be held, corresponding to the exploration sites located in the deep waters of the Gulf of Mexico.

"Mexico is determined to have the technological, financial and risk management capacity developed by the global oil industry for this type of large-scale projects.