THE MEXICAN OIL & GAS REFORMS: USE AND OCCUPANCY OF SURFACE RIGHTS AND ENERGY PROJECTS IN MEXICO
| Jurisdiction | Derecho Internacional |
(Apr 2015)
THE MEXICAN OIL & GAS REFORMS: USE AND OCCUPANCY OF SURFACE RIGHTS AND ENERGY PROJECTS IN MEXICO
Partner
Haynes & Boone
Mexico City
[Page 13D-1]
JORGE SANCHEZ is a partner at Haynes and Boone, SC in Mexico City. He regularly provides advice to foreign and domestic clients, many of which are Fortune 500 companies, in a wide range of corporate and financial matters. In the area of mining, Jorge is acknowledged for handling multi-jurisdictional mining transactions involving complex takeovers, acquisitions, disposals, project financings, mining deals with distressed situations, debt refinancings, initial exploration and claim staking, joint ventures, operations, and closures, regulatory and compliance issues, and community issues. His experience covers practically the entire spectrum of mining ventures, from precious and base metals to industrial minerals and trading of coal.
HAYNES AND BOONE, S.C.
Torre Esmeralda I, Boulevard Manuel Ávila Camacho No.
40, Despacho 1601, Col. Lomas de Chapultepec, 11000, Mexico, D.F.
Jorge A. Sánchez Dávila.
Partner
jorge.sanchez@haynesboone.com
T +52.55.5249.1834
F +52.55.5249.1801
USE AND OCCUPANCY OF SURFACE RIGHTS AND ENERGY PROJECTS IN MEXICO
This contribution does not constitute legal advice. Its purpose is to give an overview of the laws and regulations applicable to the legal matters addressed herein under Mexican law. The principles explained below should be considered in relation to concrete circumstances, with legal counsel.
[Page 13D-2]
TABLE OF CONTENTS
1 INTRODUCTION
2 MEXICAN LEGAL FRAMEWORK
a. PRIMARY PROVISIONS: POLITICAL CONSTITUTION OF THE UNITED MEXICAN STATES
b. SECONDARY PROVISIONS
3 USE AND OCCUPANCY OF THE SURFACE FOR ENERGY PROJECTS
a. MINING LAW
b. HYDROCARBONS LAW
c. ELECTRIC INDUSTRY LAW
d. GEOTHERMAL ENERGY LAW
e. NATIONAL WATERS LAW
4 CONCLUSIONS
1. INTRODUCTION
[Page 13D-3]
The purpose of this article is to address the potential overlap between different extractive industries (mining, oil and gas) and how the subject matter is currently regulated by the Mexican Laws.
As per the constitutional and legal amendments (August 2013) known as the energy reform (the "Energy Reform"), for the first time since 1938, private companies have access to exploration and production oil and gas projects in Mexico with or without Pemex; and Pemex will be able for the first time to associate in a significant manner with the oil and gas exploration industry to develop the resources assigned to it.
The Energy Reforms provides that the extraction of hydrocarbons shall have preference over any other extractive industry in Mexico in connection with the access and use of surface lands located above the oil and gas projects.
This paper seeks to analyze the access to the surface lands under the new legal regime applicable to the Energy Reform, while reviewing the following topics:
(i) Creation of boundaries or restrictions to private property rights;
(ii) Creation of a priority scale for different extractive industries;
(iii) Creation of a mechanism for the different stakeholders to determine the terms and conditions applicable to a particular surface right over a plot of land.
2. MEXICAN LEGAL FRAMEWORK
a. PRIMARY PROVISIONS: POLITICAL CONSTITUTION OF THE UNITED MEXICAN STATES
Ownership of the lands and waters within the boundaries of the national territory is vested originally in the Nation, which has the right to transmit title thereof to private persons, thereby constituting private property.
The Nation has the direct ownership of all natural resources of the continental shelf and the submarine shelf of the islands; of all minerals or substances, which in veins, ledges, masses or ore pockets, form deposits of a nature distinct from the components of the earth itself, such as the minerals from which industrial metals and metalloids are extracted; deposits of precious stones, rock-salt and the deposits of salt formed by sea water; products derived from the decomposition of rocks, when subterranean works are required for their extraction; mineral or organic deposits of materials susceptible of utilization as fertilizers; solid mineral fuels; petroleum and all solid, liquid, and gaseous hydrocarbons; and the space above the national territory to the extent and within the terms fixed by international law.
In those cases, ownership of the Nation is inalienable and imprescriptible and the exploitation, use, or appropriation of the resources (including minerals), by private persons or by companies organized according to Mexican laws, may not be undertaken except through concessions granted by the Federal Government, in accordance with rules and conditions established by law.
[Page 13D-4]
Regarding the petroleum and hydrocarbons in the subsoil, ownership of the Nation is inalienable and imprescriptible and the Nation may carry out the activities of exploration and extraction through assignments to productive companies of the State or through agreements with those companies or private persons (not through concessions).
b. SECONDARY PROVISIONS
Private property rights are regulated by the Mexican Federal Civil Code and each Civil Code of the 32 States of the United Mexican States (including the Federal District); such codes provide that the land owners are entitled to use and dispose of their property, with the limitations and manners provided by the laws.
Nonetheless, land owners do not own the minerals or substances mentioned in the fourth paragraph of Article 27 of the Political Constitution of the Mexican United States (among others minerals and hydrocarbons), nor the waters provided by the fifth paragraph of the same article.
This co-relation between private owners (of the surface) and assignees, concessionaires and licensees (of State-granted rights over minerals and hydrocarbons, among others) creates a crossroad of legal interests which is tackled by certain Federal Laws that regulate the creation of easements, surface occupation or encumbrance, or expropriation of land that could be imposed to land owners:
| Matter | Law | Publication in the Federal Official |
To continue reading
Request your trial