Abstract

Seven years after the publication of the Constitutional Energy Reform, Mexico counts with 111 Contracts in force with private companies and/or Petroleos Mexicanos (PEMEX), besides 399 Entitlements exclusive to the latter, to carry out the Exploration & Production of Oil & Gas in the country. Nevertheless, the government elected in 2018 has implemented a new energy policy that rejects several of the principles of the Energy Reform and aims to reinforce the role of the State, mainly through PEMEX, in order to achieve the objectives of energy security and sovereignty. Even though the Mexican State, through the Ministry of Energy (SENER), is responsible for defining that energy policy, there is a possibility that SENER materializes acts that violate the conditions agreed under the Contracts and several international treaties. This paper focuses on the risks of the Unitization procedures (the union of Contractual and/or Entitlements’ Areas that share an oil & gas reservoir) that unjustifiably benefit PEMEX in detriment of private companies and how this may materialize cases of indirect expropriation that would result pretty burdensome for the country.

This article was first published in Transnational Dispute Management (TDM, ISSN 1875-4120) Special Issue on “The Future of Investment Law in Latin America”. M.C. Oliver de la Cruz; "Unitization of Shared Reservoirs in Mexico and Risks of Indirect Expropriation" TDM 4 (2022), https://www.transnational-dispute-management.com/article.asp?key=2912