CNH Postpones Sessions Ahead of Dissolution

CNH suspended two plenary sessions scheduled for Dec. 3, set to address pending procedures related to PEMEX and other energy sector companies. This decision comes amid the recent energy reform approved by Congress, which includes the dissolution of CNH and the transfer of its functions to the Ministry of Energy (SENER).

Among the postponed items were the evaluation of PEMEX Exploration and Production’s development plan for Assignment AE-0166-2M-Campeche Oriente, Akal NW Field, and procedures concerning the Paché and Bricol Fields. Additionally, the Work Program and Budget 2024 presented by Fieldwood Energy for Contract CNH-R01-L02-A4/2015 and the early termination procedure for TotalEnergies EP Mexico’s contract in Contract Area CNH-R02-L01-A15.CS/2017 were to be reviewed.

The reform, expected to be enacted before the end of December, represents a significant shift in the regulation of Mexico's energy sector. Claudia Sheinbaum assured that despite the elimination of autonomous bodies like CNH and CRE, government operations would remain transparent and free from corruption. She emphasized that PEMEX and CFE would continue to function effectively under SENER’s oversight.

The proposed reform affects seven autonomous bodies, including INAI, IFT, COFECE, CNH, CRE, CONEVAL, and the National Commission for the Improvement of Education (MEJOREDU). Collectively, these bodies have requested MX$4.422 billion (US$217.876 million) for 2025, a reduction of MX$386.6 million from 2024. The government has proposed a 30% budget cut for CRE and CNH for 2025. According to the 2025 Federal Expenditure Budget (PEF) project, this reduction amounts to MX$159.9 million from the 2024 budget. CRE’s budget will decrease by MX$85.6 million to MX$199.8 million, and CNH’s budget will be reduced by MX$74 million to MX$173.2 million.

The Business Coordinating Council (CCE) warned that the disappearance of these bodies could negatively impact the economy by 0.3% of GDP due to decreased private investment. Still, Sheinbaum detailed the integration of CRE into SENER, marking the end of CRE as an autonomous entity. She explained that while CRE will maintain technical independence, it will no longer have full autonomy, especially regarding budget allocation. "Technical independence will remain, ensuring transparency and technical criteria in the allocation of permits, but without financial self-governance," Sheinbaum stated.

Other experts also warn that dissolving CRE could deter investments in the energy sector, as companies may be cautious amid regulatory uncertainties. However, the government aims to mitigate this through secondary legislation to maintain a level playing field for all market participants. “These regulatory bodies play a pivotal role in overseeing and regulating energy markets and projects. If this reform moves forward, it is essential to transfer and preserve their key functions to ensure transparency, accountability, fair competition, and impartiality, particularly for the success of public-private partnerships,” Andrés Brügmann, Managing Partner, SL Intelligence, told MBN.

The Executive will assume the responsibilities previously held by COFECE, and the Federal Telecommunications Institute (IFT) will retain its framework, with the Executive overseeing telecommunications and broadcasting policies to ensure sector development. In parallel, MORENA proposed establishing a new government-dependent entity to assume the functions of COFECE and IFT, to oversee competitiveness. This new authority will prevent, investigate, and address monopolies and market concentrations, promoting competition and market efficiency. Ricardo Monreal, Leader of MORENA, emphasized that the new entity would possess legal standing and assets, ensuring technical and operational independence while maintaining clear distinctions between investigative and adjudicative functions.