New Hydrocarbons Sector Regulations Now In Force

On October 3, 2025, the Regulations of the Hydrocarbons Sector Law (the "Regulations") was published in the Federal Register, among other regulations that will be addressed in other publications, which entered into force the day after its publication. The new Regulations replace both the Regulations of the Hydrocarbons Law and the Regulations of the Activities Referred to in Title Three of the Hydrocarbons Law, consolidating into a single instrument the provisions applicable to allocations, contracts, permits, and authorizations across all stages of the hydrocarbons value chain (upstream, midstream, and downstream).

Unlike the previous regime, the Regulations concentrate procedural and oversight powers in the Ministry of Energy ("SENER") and the newly created National Energy Commission ("CNE"), replacing the Energy Regulatory Commission ("CRE") and the National Hydrocarbons Commission ("CNH") in the context of the new Hydrocarbons Sector Law ("LSH"). The Regulations introduce substantive changes for private permit holders mainly in midstream and downstream activities, incorporates stricter operational obligations (such as certifiable measurement, traceability, and electronic reporting), and establishes more limited validity periods for permits.

The aspects of the Regulations that we consider important to highlight are the following:

Upstream Activities

The new Regulations introduce significant adjustments to the regime governing allocations and contracts. Although many of these provisions were already included in guidelines and resolutions issued by the now-extinct regulatory agencies, they are now consolidated into a single regulatory instrument. This consolidation strengthens coherence and legal certainty in the framework applicable to exploration and production activities, while redefining deadlines, conditions, and responsibilities for SENER and CNE, as well as Petróleos Mexicanos ("Pemex"), and private operators.

Among the most notable changes are the establishment of a maximum term with a deemed approval (afirmativa ficta) for Surface Recognition and Exploration ("ARES") authorizations, a one-time extension for the commencement of such activities, the requirement to execute a prior contract with SENER, and new provisions regarding resource monitoring, biennial evaluation of exploration plans, and minimum national content thresholds. Collectively, these measures reflect a broader trend toward regulatory centralization and enhanced oversight by SENER over the upstream segment of the hydrocarbons value chain.

Some of the other most significant changes and issues established for upstream activities in the Regulations are as follows:

• SENER has a maximum period of twenty-five working days to decide on applications for authorization for reconnaissance and surface exploration ("ARES"). If no resolution is issued, the authorization is deemed to have been granted.
• SENER may authorize a one-time extension for the commencement of ARES activities, which may not exceed half of the originally granted period (180 calendar days).
• Mechanisms are established for granting, modifying, revoking, or waiving allocations for own development and allocations for mixed development, as well as the possibility of substituting one for the other.
• The Regulations specify the bidding, execution, and administrative termination procedures for exploration and extraction contracts, as well as the direct award of contracts for associated natural gas for self-consumption to mining concession holders, and the migration of own-development allocations to contracts. Under the previous framework, bid rounds were conducted by the CNH; SENER now assumes this function with technical support from the CNE.
• The Regulations provide that the marketing of hydrocarbons obtained by the State shall be carried out directly by Pemex, contracted by SENER. Under the previous regime, marketing could be assigned to third parties through a bidding process.
• In own-development allocations with exploration rights, the exploration period will have the same duration as the corresponding allocation.
• The Regulations govern agreements between assignees or contractors and mining concessionaires to develop projects and resolve overlapping rights, with SENER authorized to intervene if no agreement is reached.
• Rules are set for safeguard zones, unitization of shared fields, and determination of infeasible wells for potential reuse.
• For exploration and extraction contracts, specific minimum percentages of domestic content are established to be allocated to training and technology transfer: one percent if they are in the exploration, evaluation, or transition periods, and three percent if they are in the extraction period.
• Pemex shall evaluate every two years that its exploration plans are aligned with its exploration strategy and shall submit the ratification or modification of the plan to SENER.

Saving Provisions-Upstream

For the exploration and extraction (upstream) segment, the Regulations set out various transitional mechanisms to migrate existing legal instruments from the previous regime to the new regulatory framework. These include:

• Rules are established for the migration of integrated exploration and production service contracts to exploration and extraction contracts.
• The Regulations allow the replacement of exploration and extraction contracts in which Pemex participates individually for new allocations for self-development.
• The Regulations provide for the execution of agreements amending exploration and extraction contracts executed by Pemex, either individually or in partnership, as a result of the change in its legal nature and corporate restructuring.
• Possibility of modifying exploration plans and associated programs of for self-development allocations with current exploration rights, pursuant to Article 28 of the Regulations
• The conversion of Pemex' former integrated service contracts into exploration and extraction contracts under the LSH.
• The substitution of self-development allocations for joint development allocations (or vice versa).
• The replacement of exploration and extraction contracts in which Pemex participated individually by new self-development allocations, and the adjustment of contracts executed under the previous regime to reflect Pemex' new legal nature as a state productive company.

Midstream and Downstream Activities

The new Regulations introduce substantive amendments to the regime governing midstream and downstream activities, primarily focused on the duration, control, and oversight of permits, as well as the traceability and formalization of commercial operations. The Regulations establish stricter rules and defined terms for the granting, renewal, and compliance of permits.

Key developments include the elimination of automatic extensions for permit terms, the establishment of differentiated maximum durations depending on the activity, the requirement to submit formalized contracts as a prerequisite for marketing permits, prior approval of marketing agreements and the obligation to periodically report detailed information on suppliers, customers, and contracted volumes. The Regulations also reinforce controls over the traceability of product origin, the authorized use of infrastructure, and operational safety in gas transport and distribution.

Taken together, these measures reflect a clear shift toward stronger regulatory centralization and stricter state oversight of transportation, storage, marketing, importation, and distribution activities within the hydrocarbons sector.

• The Regulations govern the granting, modification, update, assignment, relinquishment, and revocation of permits issued by the CNE for the processing, liquefaction, 4 "d en t ons .c om regasification, compression, and decompression of natural gas, as well as for the transportation and storage of natural gas and petroleum products, the transportation, storage, and marketing of petrochemicals, and the management of integrated systems. In practice, SENER and the CNE become the principal supervisory authorities for midstream and downstream activities, replacing the CRE and CNH.
• The Regulations provide for the approval of fiveyear expansion and optimization plans for pipeline transportation and storage infrastructure, as well as for the expansion of the Integrated National Natural Gas Transportation and Storage System, including projects deemed strategic. This represents a structural innovation, as planning was previously only indicative through SENER's and National Center for Natural Gas Control's ("CENAGAS") five-year plans.
• Permit holders for natural gas transportation by means other than pipelines are prohibited from providing services to other permit holders for transportation or distribution by means other than pipelines.
• Tank trucks or delivery vehicles used for the distribution of liquefied petroleum gas must have a valid insurance policy covering third-party damages in accordance with the regulations issued by the National Agency for Industrial Safety and Environmental Protection in the Hydrocarbons Sector.
• Differentiated maximum terms are established for permits, by type of activity, and extensions are no longer permitted (holders shall apply for a new permit, up to one year in advance). The effective terms of the permits have been modified as follows:
  • Pipeline transportation and storage: up to 30 years;
  • Distribution or retail: 20 to 30 years;
  • Non-pipeline transportation: 15 to 20 years;
  • Import/export: up to 5 years; and
  • Marketing: up to 2 years
• Direct transloading between transportation or distribution means other than pipelines is expressly prohibited, except in duly proven cases of force majeure, only with provisional authorization from SENER or the CNE, or emergency situations.
• Integrated system managers shall be incorporated as commercial companies with equal participation by permit holders. The Regulations set rules for cost recovery through management fees, functional separation from transportation and storage, and the creation of advisory committees with industry and user participation.
• SENER and the Ministry of Infrastructure, Communications, and Transportation shall issue a favorable pronouncement to allow third parties to acquire jet fuel at aerodromes when such fuel is intended for non-aeronautical activities.
• The Regulations prohibit the acquisition, import, assembly, leasing, or any form of use or disposal of equipment or infrastructure for oil refining without the corresponding permits or authorizations issued by the competent authority.
• The Regulations expand the operational obligations of permit holders, including:
  • certified measurement;
  • product quality control;
  • periodic information reporting;
  • formal authorization from SENER or the CNE to commence operations;
  • insurance coverage;
  • proof of lawful origin and legitimate ownership of products and systems;
  • full traceability of hydrocarbons, refined products, and petrochemicals;
  • statistical record of commercial transactions; and
  • volumetric controls over volumes, quality, and prices through SENER's electronic platform.

  Permit holders shall also participate in the verification, monitoring, and oversight activities conducted by SENER and the CNE. These obligations strengthen compliance standards through certified measurement, full traceability, and formal pre-operation authorizations.

• The Regulations introduce the obligation for private marketers to maintain valid contracts guaranteeing access to the transportation, storage, and distribution services required for their operations. They shall also maintain a minimum inventory of products as determined by SENER in subsequent provisions and immediately notify the authority of any circumstance that prevents the supply of authorized products.
• The CNE shall approve the consideration, prices, or rates for all regulated activities. These rates shall be subject to the administrative regulations issued, which shall be in accordance with the provisions of Article 117 of the LSH, binding planning for the sector, and best investment and operating practices, which protect the interests of users and end users and guarantee the well-being of the population, establishing mechanisms that promote rational demand and use of products and services and allow the permit holders to cover their efficient costs and a reasonable return.
• The CNE shall determine the cases in which natural gas, petroleum, and petrochemical pipeline transportation and storage systems shall be considered for self-use, and SENER and CNE shall determine which petrochemicals shall be subject to regulation. The Regulations define "Self-Use" as the type of permit for pipeline transportation and storage of hydrocarbons, petroleum products, and petrochemicals that is granted when the permit holder uses the hydrocarbons and petroleum products for final consumption in industrial process equipment and the petrochemicals as raw materials for its industrial processes, without such products being sold, assigned, or transferred to private parties.
• The Regulations establish definitions and rules regarding the obligation of open access without undue discrimination that are applicable to permit holders providing pipeline transportation and distribution services, and services for the storage of hydrocarbons, petroleum products, and petrochemicals are subject, except for state-owned companies or their affiliates.
• Marketing permit holders shall update and submit quarterly the register of suppliers and end customers, including current contracts, committed volumes, and final destination. Modifications shall be notified within a period of no more than five business days from their formalization. Additionally, marketers of petroleum products (except LP Gas) shall market only products under a trade name previously registered with the CNE, notifying the Commission of the brand of each marketed product, in order to provide greater traceability and assurance regarding the product's lawful origin.
• The Regulations provide that SENER or the CNE shall issue regulations establishing the minimum content of marketing contracts, consistent with the elements set forth in Article 173 of the Regulations.
• For marketers, this means that their contracts shall include, at a minimum, clauses addressing:
  • volumes and delivery schedule;
  • product quality specifications in accordance with applicable standards;
  • delivery and reception conditions;
  • prices and calculation methodology;
  • penalties for non-compliance; and
  • dispute resolution mechanisms.
• Permit holders may temporarily suspend their services or activities in the cases provided by the LSH and applicable regulations, without incurring liability when the suspension arises from an act of god or force majeure.
• Import permit holders shall reliably inform the SENER regarding the traceability of the product's origin and destination, through the means or mechanisms to be determined by SENER.
• Basic rules are established for CENAGAS's bidding procedures for strategic projects aimed at ensuring the efficient development of the Integrated National Natural Gas Transportation and Storage System.
• With respect to the economic regulation of permitted activities, the Regulations establish the application of terms and conditions for the provision of pipeline transportation and distribution services, as well as marketing, integrated system management, and storage of hydrocarbons, refined products, and petrochemicals, subject to the rules set forth in the Regulations themselves, and the regulations and guidelines to be issued by SENER and CNE.

Saving Provisions - Midstream and Downstream Activities

• Until SENER or the CNE issue the corresponding regulations, the CNE shall be responsible for resolving matters related to open access and the provision of pipeline transportation, distribution, and storage services for hydrocarbons, petroleum products, and petrochemicals, as well as the integration and incorporation of new infrastructure into integrated systems and cross-participation, in accordance with the regulations previously issued by the CRE for those purposes.
• SENER and the CNE shall issue guidelines establishing:
  • the procedure for updating the titles of permits for oil transportation, storage, and marketing, and for natural gas processing granted under the Hydrocarbons Law, so that such permits are reissued by the new competent authority in accordance with the LSH; and
  • the mechanisms for permit holders to comply with their obligations before the new regulatory authority.

  Until such guidelines are issued, permit holders shall continue fulfilling their obligations before the authorities that originally granted the permits.

• Any modification, update, change of control, or assignment of permits granted under the Hydrocarbons Law shall be processed and resolved in accordance with the provisions of the new Regulations.
• For permits issued by the extinct CRE that expire in less than one year from the entry into force of the Regulations, a period of 90 calendar days is granted for the holders to submit an application for a new permit in accordance with the LSH, the Regulations, and the applicable provisions, except for those permits that specified a specific period for renewal in their title.
• Applications for contracts, permits, authorizations and other administrative acts that are pending at the time the Regulations enter into force shall be resolved pursuant to the regulations in effect at the time of the application; however, the issuance and supervision of such authorizations, approvals or permits shall be subject to the provisions of the LSH to the extent applicable.
• Until the new electronic information platform is implemented, the registry of commercial transactions, volumes handled, quality, and prices applied, as referred to in Article 201 of the Regulations, remains in effect under its current terms.
• Until the Mexican official standards on quality specifications referred to in the Regulations are issued, the current quality specifications for hydrocarbons, petroleum products and petrochemicals remain in force. For purposes of complying with the provisions of Articles 112 and Twenty-Third Transitory of the LSH, and until NOM-016-CRE-2016 (Quality Specifications for Petroleum Products) is modified, as of January 1, 2026, the CNE shall determine compliance with that standard for permit holders engaged in retail sales of petroleum products related to gasoline or diesel. This anticipates quality verifications by the CNE at service stations and along supply chains from that date, until NOM-016 is updated.

Provisions Applicable to Upstream, Midstream y Downstream

• Once SENER issues the general administrative provisions for binding planning (which shall include evaluation criteria for granting allocations, contracts, permits, and authorizations), SENER and the CNE shall take into account the applicable energy sector planning instruments and compliance with such provisions. The binding planning of the hydrocarbons sector shall promote and ensure energy justice.
• The Regulations set out procedures and contract models for obtaining necessary land or real property rights, establishes the participation of mediators and social witnesses, and defines the process for requesting legal easements in hydrocarbons matters.
• The Regulations establish the phases and characteristics of prior consultations with Indigenous and Afro-Mexican people and communities, previously addressed only in general terms.
• The Regulations establish the phases and characteristics of prior consultations with Indigenous and Afro-Mexican people and communities, previously addressed only in general terms.
• In matters of verification and supervision, the Regulations include details on inspection procedures that may be carried out by SENER and the CNE, including verification visits, requirements for information and reports, access to databases, and summons to appear, as well as the imposition of precautionary and protective measures (for example, the provisional suspension of permitted activities).
• The Regulations establish (i) rules for the determination and imposition of sanctions, (ii) the possibility of implementing a registry of sanctioned individuals and entities to publicize the violations of the LSH and the Regulations, and (iii) rules for SENER or the CNE to carry out the temporary occupation of facilities or the intervention of permitted activities, in order to safeguard the interests of the Nation, ensuring continuity of operations and without affecting acquired rights of third parties in good faith related to the intervened permit.

General Saving Provisions

• The Regulations of the Hydrocarbons Law and the Regulations of the Activities Referred to in Title Three of the Hydrocarbons Law, published in the Federal Register on October 31, 2014, as well as the Supervision Guidelines published on February 5, 2021, are abrogated.
• Likewise, until the new regulations referred to in the Regulations are issued, all general administrative provisions, Mexican Official Standards, policies, criteria, guidelines, technical provisions, and other regulations issued by SENER, the CNE, the CRE, and the CNH shall remain in force, provided they do not conflict with the LSH or the new Regulations.
• The saving provisions also establish that proceedings related to social impact, prior consultation, or surface occupation initiated before the entry into force of the Regulations will continue to be governed by the regulations applicable at the time of their initiation. Likewise, legal acts issued or executed under the repealed provisions shall be respected under their original terms.
• If a modification is requested to a social impact assessment already resolved under the previous framework, such modification shall be processed and decided in accordance with the new Regulations.
• What will now be most important is to watch how these provisions are implemented in practice, since their effectiveness will depend on the authorities' capacity to issue and enforce the new procedures (including the guidelines for permit updates and verification of social and national content obligations) and on the ability of operators to integrate them into their business models without disrupting operations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.