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Analysis

Mexican oil exports vs imports 800 700 600 500 400

Imports 300

Thousand bbl/d 200 100

Exports 0 19841988199219962000200420082012

Mexico is expected is to become a net importer of crude oil by 2020, if import/export trends are not reversed.

Source: U.S. Energy Information Administration.

* Pemex Monthly Petroleum Statistics limited performance-related bonus payments. While the 2008 reforms were a step in the right direction, they fell short of the expectations of many hoping to reverse the

Safe, reliable and country’s declining production trend by bringing in private capital, technology and expertise. Notably, the proft-sharing effcient operations?

and reserve booking restrictions were left unchanged by the reform. It is widely acknowledged that such restrictions would need to be lifted in order to attract the capital and expertise needed to develop Mexico’s deepwater and shale Absolutely.

gas resources, which hold most of Mexico’s prospective reserves.

Legal framework

ABB provides the latest technology and solutions

Mexico’s constitution, like the constitution of the majority to the Oil & Gas industry. From the feld to the of countries in the world, provides that hydrocarbons in the boardroom, our solutions help our customers subsoil belong to the state. Article 27 provides that, when it achieve safe, reliable and effcient operations for comes to hydrocarbons, “no concessions or contracts shall today and tomorrow. We provide electrical, be granted, …and the Nation shall carry out the exploitation instrumentation, control and telecoms systems, of those substances, under the terms set forth in the respec- lifecycle services and consultancy which improve tive Regulating Law.” asset productivity, minimize costs throughout the

The constitution also stipulates that hydrocarbons and complete lifecycle, and extend equipment or basic petrochemicals are “strategic areas” for which the asset life. To learn more come and meet some public sector shall have responsibility “in an exclusive of our thought leading experts on Stand 3D 160 manner.” However, the constitution does not establish that at Offshore Europe, or visit: www.abb.co.uk/ only Pemex shall develop Mexico’s hydrocarbons. In fact, offshore-europe the constitution does not contain the words “Pemex” or “Petróleos Mexicanos.” Moreover, the constitution only limits the “exploitation” of oil and derived products and not other downstream activities.

The Regulatory Law of Article 27 (Ley Reglamentaria del

Artículo 27 Constitucional en el Ramo del Petróleo) goes beyond the terms of the constitution in at least two ways.

ABB

First, it establishes that all of the following, and not only the email: [email protected] “exploitation” of oil, are activities that are reserved to the www.abb.co.uk/offshore-europe oedigital.com 021_OE0813_Analysis.indd 23 7/22/13 12:19 AM