The oil industry is being transformed following the 2013 Energy Reform, which liberalised the sector. Mexico has large hydrocarbon potential, including deep water, tight oil, heavy oil and unconventional plays. Companies will be able to partner with state-owned Pemex or operate on their own in Round One, launched in 2015. While development risks are likely to rise as E&P activities pick up pace, the overall above ground risk profile is anticipated to substantially improve in the near term.
As part of the 2013 Energy Reform, IOCs will be able to commercialise oil and refined product as they wish. Pemex's pricing formulas should remain unchanged, as they only apply to existing long term contracts with current clients. Depending on a project's partners, additional oil production could be priced in the spot market or used directly by the producer for refining. Mexico currently exports three types of oil-blends: Maya, Olmeca and Isthmus. The prices of these crudes are based on a formula that depends on the price of other international crude streams and a constant "k" factor of adjustment that is determined monthly by the Ministry of Energy (SENER) and the Ministry of Finance. Gas pricing is controlled by the Energy Regulatory Commission (CRE) and is determined by a formula that includes production and/or importing costs, transport and logistic costs. It is moving towards a more market-based system, pegged to the Henry Hub benchmark, A separate Mexico natural gas benchmark price is also a possibility. LNG import prices are indexed to Henry Hub. Most of Mexico's LNG is contracted by the public power utility (CFE) and this higher cost gas is largely passed onto the industrial sector. Separately, domestic prices of gasoline have historically been subsidised, but on 1 January 2015 these were adjusted upwards by 1.9%. While a strategy to liberalise prices with a managed float in 2016 backfired, full liberalisation of the gasoline price market is expected in 2018. In a similar regard, the government has sped up the liberalisation of the gasoline and diesel markets by allowing the private sector to import fuels beginning in April 2016 instead of January 2017 as originally planned.