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FDI: Entry and ownership rule
On 11 August 2014, the Mexican president Enrique Peńa Nieto, signed the 'Hydrocarbons Law', opening up the domestic hydrocarbon market for foreign companies in order to explore and procude oil and gas. Article 29 of the new law extends the bidding process for extraction rights in new hydrocarbon projects to the whole world. Previously, the hydrocarbons market constituted a state monopoly where state-owned Pemex (i.e., Petroleos Mexicanos) was its sole beneficiary.
The Hydrocarbons Law belongs to a package of secondary legislation constituting the legal framework for the reform of the energy sector. The package includes 9 new regulations and amendments to 12 existing ones. Another important regulation belonging to this framework is the Electricity Industry Law (Ley de la Industria Eléctrica). For the latter, please, consult measure no. 7608 under Related Measures.
The market liberalization notwithstanding, the Hydrocarbons Law introduces local content requirements for extraction and exploration projects. All projects, except for those in deep and ultra deep waters, need to buy at least 35% of their equipment on the domestic market. Also, the government will implement a permit system im order to grant import and export permits to all interested parties. Some of them will be granted in stages, such as for Diesel and gasoline.
As from 1 January 2015 on, all Mexican companies are required to obtain a 'prior permit' in order to import or export petroleum and oil products. The permits are issued by the Ministry of Energy (SENER) and valid for a year with the possibility of renewal for another year up to three times. The corresponding regulation was published on 29 December 2014 in the Official Federal Gazette and allows all interested Mexican parties to trade with hydrocarbons, i.e., to apply for a prior permit. The regulation also lists the affected HS codes.
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