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Analysis

PEMEX's Fiscal Regime 2014

Wed, 01/21/2015 - 09:34

The taxes and duties paid by PEMEX in 2014 amounted to approximately 32.2% of the Mexican government’s revenues in 2013 and 30.4% in 2014. The fiscal regime for PEMEX and its subsidiaries became effective in 2006 and was subsequently modified from time to time. The Secondary Legislation of the Energy Reform that was enacted in August 2014 introduces a new fiscal regime that will be applicable to the new contractual arrangements that will govern exploration and production activities in Mexico beginning on January 1, 2015, as well as a new state dividend to be paid by PEMEX and its subsidiaries beginning on January 1, 2016. Under the 2014 fiscal regime, PEMEX Exploration and Production was governed by the Federal Duties Law, while the other subsidiaries were governed by the 2014 Federal Revenue Law. In 2014, the fiscal regime for PEMEX Exploration and Production consisted of the following duties:

ORDINARY HYDROCARBONS DUTY

A rate of 71.5% applied in 2014 to the annual value of extracted production of crude oil and natural gas minus certain permitted deductions, and applied to all crude oil and natural gas production other than production from fields located in Chicontepec, in the deepwater areas of the Gulf of Mexico, and annual production from specified marginal fields exceeding an annual base level of production. Cost deductions could not exceed US$6.50 per barrel of crude oil and US$2.70 per million Btu of nonassociated natural gas.

SPECIAL HYDROCARBONS DUTY

A rate of 30% or 36% applied to the value of extracted production of crude oil and natural gas from fields located in Chicontepec and in deepwaters areas of the Gulf of Mexico, and to the value of production exceeding an annual base level of production from marginal fields, minus certain permitted deductions, subject to the limit established by the Federal Duties Law of US$36.86 per boe in 2014.

EXTRACTION OF HYDROCARBONS DUTY

A rate of 15% applied to the value of extracted production of crude oil and natural gas from fields located in Chicontepec and in deepwater areas of the Gulf of Mexico, and to the annual production exceeding the annual base level of production from marginal fields.

ADDITIONAL DUTY ON HYDROCARBONS

A rate of 52% applied to the value resulting from the multiplication of the difference between the annual Mexican crude oil export price corresponding to the field from which such crude oil was extracted, and a threshold price of US$68.04 per barrel for 2014, by the extracted volume for the relevant year. This duty applied only to fields located in Chicontepec and in the deepwater areas of the Gulf of Mexico, and production exceeding base production from marginal fields, and only if the Mexican crude oil export price per barrel of the extracted crude oil was greater than the threshold price

HYDROCARBONS DUTY FOR THE STABILIZATION FUND

Rates between 1% and 10% applied to the value of the extracted crude oil production when the weighted average Mexican crude oil export price for 2014 exceeded US$22.00 per barrel. These rates applied to all crude oil production other than production from fields located in Chicontepec, in the deepwater areas of the Gulf of Mexico, and production exceeding an annual base level of production from specified marginal fields.

DUTY FOR SCIENTIFIC AND TECHNOLOGICAL RESEARCH ON ENERGY

A rate of 0.65% of the value of extracted crude oil and natural gas production applied in 2014.

DUTY FOR OIL MONITORING

A rate of 0.003% applied in 2014 to the value of extracted production of crude oil and natural gas for the year.

EXTRAORDINARY DUTY ON CRUDE OIL EXPORTS

A rate of 13.1% applied to the value resulting from the multiplication of the difference between the annual weighted average Mexican crude oil export price and the budgeted crude oil price, by the annual export volume. The budgeted crude oil price for 2014 was US$85.00 per barrel.

DUTY TO REGULATE AND SUPERVISE THE EXPLORATION AND EXPLOITATION OF HYDROCARBONS

A rate of 0.03% applied to the value of extracted production of crude oil and natural gas.