PAN Energy Proposal 2013

Houston, August 1, 2013

During the course of more than 8 hours of wrestling with the PAN energy proposal (a document of 60-plus pages), I made progress on three fronts:

1) I made the document more intuitively accessible by reorganizing the extensive, introductory sections, putting them in the back as annexes. In this way, what is essential about the PAN proposal, namely, its overall vision and the specific legislative proposals, is up front.

2) The new organization permitted a Table of Contents, a courtesy to the reader that was absent in the original document.

3) As Microsoft Word provides an indexing capability, this feature was applied, permitting an interesting gestalt of the contents of the proposal.

Attached are 2 pages of the TOC and 2 pages of Index. The complete proposal will be available once we have coded bookmarks, and have tried to correct some of the glitches in the index.

As for the contents of the PAN proposal, as we presently understand it, there are four basic ideas:

1) Mexico’s oil rent will be administered, in whole or in part, by a new, constitutionally defined agency that is to function along the lines of the Norwegian Petroleum Fund.

2) In the upstream, the CNH will be made responsible for the issuing of concessions:

a. Thus, providing a missing piece of the Transboundary Hydrocarbon Agreement of 2012
b. Also deepwater concessions
c. Also shale
d. Other

3) In the midstream and downstream, the CRE will be responsible for issuing licenses to private parties in the areas not only of natural gas but also for electric power, refining and petrochemicals.

4) In all areas of the energy sector competition will be encouraged.

What the PAN does not specify is the type of concession: a tax-and-royalty system, as found in the U.S., Canada and other countries that do not have a national oil company; or a concession system that necessarily requires production sharing (the legal foundation for which, as we have been telling the Wall Street Journal, is a private oil mineral interest).

We will need to give the proposal a close, front-to-back reading to better understand how all the moving parts—many of them new to Mexico—are supposed to work together.

DOWNLOAD Table of Contents and Index.

Written by

Mexico Energy Intelligence

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.