CCN MEXICO REPORT

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Issue #
130
 – 
May 2015

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COFECE Draft guide on Notifying Economic Concentrations Opened to Public Comment

May 7, 2015

On April 22, 2014, Mexico’s Antitrust Commission (COFECE for its Spanish acronym)published an Excerpt of the First Draft of the Guide to Notify Economic Concentrations in theOfficial Journal of the Federation. The Technical Secretary provides notice of thecommencement of the period for public comment for 30 business days after the date ofpublication so that interested person may present their comments to the draft to COFECE. Thepurpose of the Guide is to clearly explain the concepts, regulations and procedures associatedwith the notification of economic concentrations and, in effect, to facilitate the process of saidprocedures for notifying economic agents. The Guide is important because it is the first one to bepublished under the terms of the new Federal Antitrust Law passed on May 23, 2014. Once theperiod for public comment ends, COFECE will consider every comment received to make itsfinal adjustments to the Guide prior to the publication of its final version. The published draft ofthe Guide is available, in its entirety, on the COFECE portal (www.cofece.mx) under theFrequent Users, Public Comments section. Comments may be submitted directly to COFECE orsent via email to consulta-publical@cofece.mx.

Relevant Aspects and Current Situation of Pemex Following the Implementation of the Energy Reform

May 7, 2015

In the midst of Mexico’s implementation of the energy reform, and the complicated situationwith the fall of oil prices, the internal restructure and the development of investment projects byPetróleos Mexicanos (Pemex) remains at a halt. For the past several months, the private sectorhas drawn up new strategies and alliances in search of opportunities for investments due to theopening of the sector, while preparing to compete for the best technical tools and financialstrategies.Pemex appears to be facing the competition alone and is also faced with converting itself into aproductive state entity. Its biggest challenges are the following: (i) a lack of clear investmentobjectives; (ii) financial debt and employment liabilities such as pensions and retirements; (iii) ahigh rate of income tax; and (iv) lack of a budget.In the past months, the oil industry has radically changed following the worldwide drop in theprice of a barrel of oil. In addition, this past February, Mexico’s Department of Finance andPublic Credit requested that Pemex reduce its budget by 60 billion pesos, significantly affectingits current expenses and potential capacity for investments.Taking into consideration Pemex’s history, size and geographical conditions, it is apparent thatPemex is fragmented by differing objectives and lacks clear goals. Pemex needs to reorganize itssubsidiaries and restructure itself as a business as soon as possible to reach its short, mid-termand long term goals, raising not only Pemex’s expectations as a business, but also those ofpotential investors in new projects and opportunities alike.