The Treasury proposed to the Congress assign to Petroleos Mexicanos (Pemex) a budget of 478,282 millones de pesos, that is lower in 11% to that adopted for this year, Although lower in just 0.06% budget that became the State after the cut of 62,000 millions of pesos which determined you Hacienda by the fall in oil prices. In both, the amount for the 2016 is superior in just 1.4% what the Government projected as transfers by exploitation of crude oil from Pemex to the Mexican Petroleum Fund for stabilization and development.

Therefore, the State would be with only 6,743 millions of pesos for reinvestment, According to the project's tax package, which gave the Treasury to Congress on Tuesday. For the first time in its history, the budget package that Pemex exert its activities is divided into eight subsidiaries that are the product of the transformation to the inside of the company after the energy reform.

It is the largest subsidiary of Pemex so, Exploration and production focus 68.9% budget, with 329,906 million pesos for their activities. 20 key to understand how was the energy reform Open the way to foreign companies to explore and exploit oil in Mexico, allow individuals to generate and supply electricity, set to compete at Petroleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE) with other companies, as well as changes in energy prices policy, they are some of the main points of the reform ready to begin to be implemented.

This reform to the Constitution was pushed by President Enrique Peña Nieto and promulgated in December of 2013, After lengthy negotiations and tensions between the main political parties. Sin embargo, I still needed of secondary laws which establish the rules for its implementation. The President himself said that it plans to publish legislation next week. This will start all these transformations, the most controversial, Since the President says are needed to boost the country's economic growth and jobs and, on the other hand, left-wing parties describe them as a “dispossession” to the nation's resources. Then, We present to you 20 points that will help you understand what these changes are.

1. Opening in oil and gas Reform and its secondary laws allow private companies, domestic or foreign, invest in the exploration and exploitation of hydrocarbons in Mexico: oil, gas and its derivatives. Since the oil expropriation of 1938, These activities were exclusive of the State. The Government parties and federal institutional revolutionary (PRI) and national action (BREAD), promoters of these changes, they say that the country will maintain sovereignty over their resources, Since the Constitution indicates that of all hydrocarbon property corresponds to the nation in a way “inalienable and imprescriptible”. To the left, on the other hand, These measures imply that Mexico give individuals control of strategic goods for your future.

2. Oil contracts The way in which private companies may participate in the exploration and exploitation of hydrocarbons will be the conclusion of contracts with the State. These contracts may have a license, services and utility or production-sharing, and they will be assigned through bidding by the national hydrocarbons Commission (CNH), one of the two regulators in the sector. Supporters of the reform say that one of the mechanisms that will guarantee the transparency of these contracts will be that, each month, the CNH shall publish “the number of contracts for the exploration and extraction that is effective, as well as their terms and conditions”, According to the new law of hydrocarbons.

3. Occupation of land The hydrocarbons law contemplates the possibility of that contract given to a particular area encompasses lands held by a landlord. In that case, to be able to start its activities, the contractor will have to reach an agreement with the land owner, whether it is for the sale or to allow the use through the figures of legal easement, temporary occupation or superficial involvement. Part of the agreement, the individual must be set to what percentage of revenues will pay to the owner to use their land: of 0.5% to 2% If oil or natural gas explodes, and 0.5% to 3% If it explodes schist or shale gas. At the Congress, the left objected to this point because it is considered equivalent to an expropriation in favour of private companies, that will mainly affect the rights of peasants.

4. ‘ Fracking’ In relation to the previous point, the law also opens the door to exploitation of schist or shale gas, that is obtained through a practice known as hydraulic fracturing, or fracking. This consists of drill ground and push water and chemicals to remove hydrocarbon. Opponents of reform considered that this practice is contrary to the environment, because it involves a high cost of water and the risk of this fluid reservoirs become contaminated. In response, supporters of the legislation argue that this method has been endorsed by scientists as the Mexican Mario Molina, winner of the Nobel Prize in chemistry.

5. Electrical opening As well as the reform open to private investment the hydrocarbon industry, It also does with the electricity sector. This means that private companies will be able to generate and supply this type of energy, and compete with the CFE.

6. Permissions The delivery of permits for the generation and supply of electricity will be responsible for the other sector regulator, the Energy Regulatory Commission (CRE). According to the law of the electric industry, This institution is also empowered to modify them, revoke them or extend them.

7. The ‘ arbitrators’ Both the CNH and the CRE already exist at present. What Congress did in the energy reform and secondary laws was to give them greater powers, as well as change the composition of its bodies of address. So far, full of both institutions is integrated by five members. From the new legislation comes into force, the number will rise to seven. All of them will be proposed by the President and will have to be ratified by the Senate.

8. Regulators, independent? The CNH and the CRE will be regulatory bodies “coordinated” with the federal Government. According to the PRI and the PAN, This figure allows to have some autonomy and, at the same time, they need to make decisions that are consistent with the energy policy defined by the Secretariat of energy (Sener). On the other hand, the left believes that with this measure the CNH and the CRE will be subordinate to the orders of the President and his Cabinet.

9. More gas stations The hydrocarbons law establishes that, starting from the 1 in January of 2016, the CRE may grant permission for the free sale of petrol and diesel, i.e., for the opening of more service stations. To date, only stations that exist in Mexico are the franchises of Pemex.

10. Million-dollar fines Within the same law, However, provided for fines of between 1 million and 20 millions of pesos for those gas stations that sell incomplete liters of fuel, a practice frequently denounced before the Procuraduría Federal del Consumidor (Profeco).

11. Price of petrol and gas The new legislation provides for changes in fuel prices policy. In the case of the gasoline and diesel, por ejemplo, during the remainder of 2014 the price will remain under the control of the Ministry of finance and public credit (SHCP). Of 2015 to 2017, the federal Government taking into account differences in transportation costs between the regions of the country or variations in international markets priced. And of the 1 in January of 2018 hereinafter, the price will be determined by the market. In a similar way, liquefied petroleum or LP gas price will be released starting from the 1 in January of 2017.

12. Electricity rates In the case of electricity rates, the new laws do not provide for changes by the moment. This means that the generalized subsidy will be maintained, Although the rules targeting that support will focus on the sectors of lower income of marginalized rural and urban areas. PRI and Pan, además, They claim that he as competition in the sector to grow, rates will start to go down and this will benefit consumers.

13. PEMEX and CFE The energy reform also involves new laws for both institutions, It will become the State productive enterprises. With this, they will have to modify its form of organization and adopt a similar to a private company corporate governance. For this reason, they will both have a director, responsible for the daily operation, as a Board of Directors, responsible for the long term choices. PEMEX will have a Council of 10 Members: five federal officials and five independent directors. The CFE will also be of 10 Members: five federal officials, four independent directors and one appointed by the Trade Union.

14. Labor liabilities One of the latest measures included in energy legislation was to open the possibility that the State takes a share of labor liabilities of Pemex and CFE, that amounted to 1.6 billions of pesos for pensions and retirement of their workers. According to the PRI and the PAN, This is necessary for “clean up” the finances of both institutions and let them better able to compete with the private companies that will arrive in Mexico.

15. The relationship with unions Sin embargo, the conversion of those liabilities into public debt is subject to some requirements. The most controversial is Pemex and the CFE to achieve changes in the collective contracts of employment with their unions, so new retirement conditions are established for their new employees, with higher retirement ages and a system of individual saving accounts.

16. Oil revenues With the opening of the energy sector, proponents of reform hope to grow the country's income derived from hydrocarbons. These revenues are mainly of three types: rights, It will pay Pemex and its subsidiaries; considerations, that will pay individuals with exploration and exploitation contracts, and taxes, It will pay the two. The compensation shall be determined in each contract, they will depend on the type of hydrocarbon exploited and will go to the new Mexican oil fund. Taxes correspond to the SHCP.

17. Oil Fund The Fund shall be constituted as a trust in the Bank of Mexico (Banxico), in order to manage the income derived from hydrocarbons. In this sense, you will need to monitor each contractor to make their payments and receive earnings that correspond. You will also need to define a strategy of long-term savings and deliver resources to the Federation.

18. The PEF The oil fund law establishes that, each year, This will have to deliver resources equivalent to the 4.7% the gross domestic product (IF!) for the budget of expenditure of the Federation (PEF). According to supporters of the energy reform, This ensures that the State follow obtaining hydrocarbons an amount equivalent to that currently receives.

19. The ‘ heads’ background The new legislation says that the Fund will be directed by a technical committee composed of seven members: the Secretary of the Treasury, the Secretary of energy, the Banxico Governor and four independent. The latter will be proposed by the President and must be ratified by two-thirds of the senators.

20. Fund for producing States The package of fiscal rules of the energy legislation, There is also provision to create a resource pool for the States and oil-producing municipalities. This bag is nutria money raised via tax by activities of exploration and exploitation. The proposal, discussed during the last days of the Congress sessions, It generated controversy to the inside of the left, because while deputies and Senators of this trend criticized the energy reform, some of them - originating in oil entities such as Tabasco - voted in favour of the creation of the new Fund.