Concessions vs. License in Mexico

Ripple effects of the 1960 anachronism in the
Peña oil regime of 2013

HOUSTON — In its public-relations campaign in 2013, the Peña represented its oil reform as a turning back of the clock to the Cárdenas‐era legal regime of 1940. For that, there were two constitutional amendments to Article 27 from 1960 that stood in the way. One of these was a prohibition against “contracts” (understood as oil contracts directly between the State and an oil company) and another against “concessions” in relation to petroleum deposits.

The distinguishing feature of a concession was not explained. For reasons never made public, the Peña legal team determined that the constitutional amendment that would eventually be promulgated on December 20, 2013, would remove only the prohibition of contracts; the prohibition of concessions was allowed to stand.

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Written by

George Baker

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.

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