OIL AND GAS LAW UPDATE: MEXICO

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development, and Investment
(Apr 2011)
CHAPTER 24D
OIL AND GAS LAW UPDATE: MEXICO
Juan Carlos Serra
Basham, Ringe y Correa, S.C.
Mexico City, Mexico

JUAN CARLOS SERRA is a graduate of the Law School at The National University of Mexico (Universidad Nacional Autónoma de México) and obtained a Master's Degree from Georgetown University as a Fulbright Scholar. His formal education includes: a Diploma Degree in Corporate and Economic Law from The Panamerican University (Universidad Panamericana) and a Diploma Degree in Energy Law from The Iberoamerican University (Universidad Iberoamericana). He joined Basham Ringe y Correa SC in 1996 and has been appointed as a Partner of the Energy and Mining Practice of the firm. Mr. Serra has participated in areas such as planning and implementation of operations, both national and worldwide, including: joint ventures, mergers and acquisitions, reorganizations, investments, acquisitions, and has solid experience participating in national and international public bidding as well as extensive advice in energy and mining issues. He is member of the Mexican Legal Bar (Barra Mexicana del Colegio de Abogados), the Institute of Energy Law, the Rocky Mountain Mineral Law Foundation, and the International Bar Association (IBA).

An update of the Mexican Oil & Gas Sector

Juan Carlos Serra

A brief history of the Mexican Oil & Gas Sector

• March 18, 1938. Expropriation of Mexican Oil & Gas industry.

• June 7, 1938. Petróleos Mexicanos was created.

• March, 1971. Cantarell Oil field is discovered.

Cantarell Production*
2005	2006	2007	2008	2009
2035.3	1800.9	1490.5	1039.5	684.8

• June, 2005. Pemex produced an historical daily average of 3 million 425 thousand barrels of crude oil equivalent.

Facts about the Mexican Oil & Gas Industry

• Mexican Oil & Gas Industry comprises:

— Exploration; Exploitation; Refining of Hydrocarbons.

— First-Hand Sales of Petroleum Products.

— Basic Petrochemicals.

• Private Entities shall carry out the storage, transportation and distribution of natural gas, liquefied petroleum gas and methane gas.

Mexico in the World**
Ranking
• Proved Crude Oil Reserves.	17
• Proved Gas Reserves.	31
• Crude Oil Production.	6
• Natural Gas Production.	12

[Page 24D-2]

Pemex Operating Summary

• E&P
2006	2007	2008	2009	2010
- Crude Oil Production1	3.26	3.08	2.79	2.60	2.57
- Natural Gas Production2	5.36	6.06	6.92	7.03	7.02
- 3P Reserves3	45.38	44.48	43.56	43.08	43.1
• Refining
- Capacity4	1.540	1.540	1.540	1.540	1.540

Basham, Ringe y Correa 2011

Pemex Prospective Resources

Basin	MMMboe
Burgos	3.1
Deep Waters in the GOM	29.5
Sabinas	0.3
Sureste (Southeastern)	16.7
Tampico-Misanlla (ATG)	1.7
Veracruz	0.7
Yucatan Platform	0.3
Total	52.3

Pemex Prospective Resources Regions⁵

2008 Mexico's Energy Reform

• Authorities.

— Creation of the National Hydrocarbons...