Landmark Reform Opens Up Mexico's Energy Sector

On 23 December 2013, the Mexico energy reform bill formally became the law following approval by Mexico's Congress and ratification by a majority of Mexico's state legislatures. This amends Articles 25, 27 and 28 of the Constitution and includes 21 transitory provisions that direct and further develop the reforms.

The reform could significantly increase oil and natural gas productions, as well as generate economic growth for Mexico, by potentially attracting up to $20 billion worth of foreign investments annually.

For the full implementation of the reform to occur, the Mexican Congress will have to pass additional secondary laws within 120 calendar days of the final enactment of the reform. This will detail, inter alia, the terms, conditions, royalty structures and tax rates applicable.