Mexico unveils private sector power contracts in energy reform

Mexico's government proposed legislation to allow private energy contracts while maintaining state utility Federal Electricity Commission's (CFE) minimum 54% market share, Energy Minister Luz Elena González announced on January 29.
The reform package includes six new laws and amendments to five existing ones, replacing energy legislation from 2013. The changes will consolidate state oil firm Pemex and CFE's corporate structures while simplifying their operations.
"Private sector participation will be allowed through six schemes, three for self-consumption and three for power generation," said González.
The legislation creates a new National Energy Commission to replace the National Hydrocarbons Commission and Energy Regulatory Commission. The commission will oversee power generation permits, tariff setting and wholesale market supervision.
The reform will dissolve three Pemex subsidiaries and nearly 50 affiliates, alongside nine CFE subsidiaries and four affiliates. Both companies will receive special budget and debt management regimes to streamline operations.
President Claudia Sheinbaum's government plans to present CFE's investment programme next week, detailing opportunities for private investment. The legislation maintains CFE's commitment to keep tariff increases below inflation.
State oil company Pemex has suspended operations on three offshore rigs and accumulated $283mn in unpaid bills to contractors amid a growing cash crunch, drilling companies reported on January 28.
The payment delays and operational disruptions highlight deepening financial troubles at Mexico's national oil company as it struggles to meet obligations to key suppliers.
Norwegian-listed Paratus Energy Services, which supplies five jack-up rigs to Pemex, reported no payments received since July 2024, with outstanding receivables reaching $283mn by September. The company has agreed terms with Pemex to settle $209mn in overdue invoices.
"The company is exploring options to monetise a portion of its receivables," said Paratus in a statement, warning of operational risks if payment delays continue.
Borr Drilling saw three of its rigs – Galar, Gersemi and Grid – suspended by Pemex in late 2024, with operations halted until March 31, 2025. The rigs were under contracts originally set to run through December 2025.
Mexican construction firm CICSA also lost its contract for the Independencia I jack-up rig after Pemex cancelled the agreement, reported Baird Maritime.
The suspensions come as Mexican President Claudia Sheinbaum's administration pledges to resolve Pemex's outstanding debts by March 2025. However, analysts warn the payment issues could deter foreign investment in Mexico's energy sector.
Borr Drilling maintains a $1.62bn contract backlog and has secured new work outside Mexico, including a long-term rig contract in West Africa.
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