Member Article

An amendment to the Law Regulating Article 27 of the Mexican Constitution Concerning Petroleum (the “Law”) was recently passed by the Mexican Congress and published in the Federal Official Gazette on January 12, 2006. In summary, the amendment to the Law allows Petroleos Mexicanos (“PEMEX”) and its subsidiary companies to co-generate electricity for their own consumption provided they sell surplus power to the two federal electric power utilities, Comision Federal de Electricidad and to Luz y Fuerza del Centro, in order for these to supply such power to third parties. It is expected that the first PEMEX co-generation project will be located at the Centro Procesador de Nuevo Pemex in the State of Tabasco and will have a capacity of 300 megawatts with an investment of 240 million dollars. PEMEX estimates that this project would generate savings for PEMEX of up to 50 million pesos in its annual electric bill. PEMEX currently pays to the Comision Federal de Electricidad a rate that is 250% over the rate the industrial sector pays in Mexico mainly due to factors based on its consumption pattern such as the peak usage and the cyclical nature of its demand. If you would like further information, do not hesitate to contact the lawyers of the area, Daniel A. Del Río [email protected] and Juan Carlos Serra [email protected]