Monday, March 31, 2008

 

Myths and paradoxes in Mexico's oil sector: Rogelio López Velarde

Energia.com

Rogelio López-Velarde, a principal in his eponymous law firm based in Mexico City, brings a scholarly and policy passion to the study of the current structure and history of oil legislation in Mexico.  In the linked article (in Spanish) he provides fresh insights into the topic of energy reform in the oil sector.

The topics considered in the article are these:

1.   The Constitution does not prohibit everything; [needless] restrictions come from the enabling legislation.

2.   Many oil industry activities should not be considered "strategic" per the Constitutional Amendment of 1983.

3.   Making the State responsible for all areas of the oil industry is counterproductive and incorrect.

4.   Many of the activities monopolized by Pemex, LPG imports, for example, are not included in the legal definition of the oil industry as given in the Petroleum Law of 1958.

5.   Sovereignty does not reside in a monopoly but in its regulatory institutions.

6.   Paradoxically, the resent legal structure of the oil industry promotes economic denationalization.

7.   Oil policy is not set by the Energy Ministry but by Pemex and, ultimately, by the Finance Ministry.

8.   The "Board of Directors" of Pemex is a legal fiction [and is neither a board nor does it direct]

9.   Only Pemex of all oil companies cannot finance its operations and needs with its own reserves.

10.  Again paradoxically, Pemex can have strategic partners but only outside of Mexican territory.

 

Access link to attachment (go to March 24)

 

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Rogelio López Velarde: "Myths and paradoxes in Mexico's oil sector,” Library, March 24, 2008; Energia.com (Baker and Associates), Houston, Texas

 

Translation Energia.com