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About Mexico’s Energy Sector ––– Our reports offer a unique source of historical, market and policy analysis. We look years ahead to visualize enhancements that are needed to public institutions, laws and policies to favor regulated market solutions.

Mexico's Problematic E&P Safety Regime

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Mexico's Problematic E&P Safety Regime: Additional work needed for Macondo-scale regulation

The 2013-14 Energy Reform in Mexico created a new agency that would be responsible for standards and compliance in relation to commerce in hydrocarbons. Unlike the United States and Norway, among other jurisdictions, where cognate agencies would be focused specifically on offshore oil and gas operations, the mandate of Mexico’s agency extends across the entire hydrocarbon value chain.

Mexico’s Hydrocarbon Safety Agency (or ASEA by in acronym in Spanish) had a rocky start, employing staff with limited experienced and a minimalist budget that motivated employees to bring furniture from home to fill out their offices.

On May 13, 2016, the agency issued its general guidelines on the preparation and submission by regulated parties of a safety management system. Seven months later, ASEA issued its guidelines specifically for exploration and production (E&P).

The issuance of safety guidelines for E&P were timed to coincide with the award, on December 5, 2016, of nine offshore blocks. These are located in deep-and ultra-deep waters in the Gulf of Mexico, four of them in the Perdido Area close to the U.S. border.

The regime relies on hortatory messages, outsourced expertise with third-party inspectors and self- regulation. In the course of 44 pages and 181 articles, deberán (they should) appears 213 times. Regulated Parties are enjoined to identify hazards and risks; their assessments will be reviewed by an Authorized Third Party.

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