G20 SUBSIDIES FOR OIL, GAS AND COAL PRODUCTION: MEXICO

This data sheet is a background paper to the report Empty promises: G20 subsidies to oil, gas and coal production by Oil Ch
the Overseas Development Institute (ODI). It builds on the research completed for the report The fossil fuel bailout: G20 s
exploration, published in 2014.

For the purpose of this report, production subsidies for fossil fuels include: national subsidies, investment by state-owned en
finance. The full report provides a detailed discussion of technical and transparency issues in identifying fossil production
methodology used in this desk-based study. In addition, a brief outline of the methodology used in this report is also in t

The authors welcome feedback on the full report, on the country study, and on this data sheet to improve the accuracy and tra
G20 government support to fossil fuel production.

Read the full report: http://odi.org/empty-promises

Read the Mexico country study: http://www.odi.org/publications/10077-g20-subsidies-oil-gas-coal-production-mex

Contents:
National subsidies
SOE investment
Public finance (summary)
Public finance (domestic - full)
Public finance (international - full)
National subsidies (million USD - except where otherwise indicated)

Subsidy Subsidy type Targeted energy source

Tax expenditure

Labor and pension debt subsidy Tax expenditure Oil and electricity

100% deduction of exploration

expenditure on income tax Tax deduction Oil and gas
payments

25% of original investments in the

exploration and development of
Tax deduction Oil and gas
oil and gas deposits is deductible
from income tax payments

10% of amount invested in

infrastructure for storage and
transport of oil and gas is Tax deduction Oil and gas
deductible from income tax
payments
Direct spending (including on infrastructure)
N/A
Other support mechanisms
N/A
Total national subsidies ($ m)
Total national subsidies (MXP m)
Stage 2013 estimate 2014 estimate

Production 1076 1626

Exploration N.A*

Exploration and production N.A*

Storage and transport N.A*

1,076 1,626
14,284 22,497
Estimated annual amount,
Source
million USD

1351

http://elhorizonte.mx/periodico/mas-noticias/505557

N.A*
http://www.ey.com/Publication/vwLUAssets/EY-2015-Global-oil-and-gas-tax-guide/$FILE/EY

N.A*

http://www.ey.com/Publication/vwLUAssets/EY-2015-Global-oil-and-gas-tax-guide/$FILE/EY

N.A*

http://www.ey.com/Publication/vwLUAssets/EY-2015-Global-oil-and-gas-tax-guide/$FILE/EY

1,351
18,390
Notes

Half of the total amount ($1.3 billion average over 2013 and 2014) is included in the table of national
subsidies to account for the portion of the subsidy going to Pemex, since the amount of the CFE pension
liability going towards fossil fuels could not be determined. A conservative estimate of 50% has been
included in national subsidies to fossil fuel production, as Pemex’s liabilities are estimated to be three times
those of CFE (Financial Times, 2014).
SOE Investment (USD million - except where otherwise indicated)

Project /
Name of SOE Description
Investment

Pemex Capital expenditCapital expenditure

Comisión Federal de Electricidad (CFE) Capital expenditCapital expenditure
 Value Value

Annualised
Fossil Fuel Sector Average
2013 2014 Value

Upstream oil and gas 26000 27700 26850

Electricity (avg. 72% FF na na na
26,850
 Source:

http://ebdi.pemex.com/bdi/bdiController.do?action=temas
Public finance summary (USD million - except where otherwise indicated)

Oil and gas

pipelines,
Coal fired Upstream oil power plants
Institution name Coal mining power and gas and refineries
Domestic
Banco Nacional de Obras y Servicios Públicos - Banobras 561
Nacional Financiera – Nafinsa 198
Banco Nacional de Comercio Exterior – Bancomext 33 50
Subtotal domestic - - 33 808
International
Multilateral development banks 0 6 17 34
Subtotal international 0 6 17 34

Totals 2013/2014 0 6 50 842

Total 2013/2014 MXP
 Total fossil fuel Annual avg. fossil
finance 2013 & 2014 fuel finance

561 280
198 99
83 42
841 421

56 28
56 28

897 449
12,167 6,083
Public finance domestic (full) (USD - except where otherwise indicated)

PF Institution Project
Banco Nacional de Comercio Exterior – BancomGrupo R Rig Financing 2013
Banco Nacional de Comercio Exterior – BancomNuevo Pemex Cogeneration Refinancing 2014 (300
Nacional Financiera – Nafinsa Nuevo Pemex Cogeneration Refinancing 2014 (300
Nacional Financiera – Nafinsa Los Ramones Sur Gas Pipeline (287KM)
Banco Nacional de Obras y Servicios Públicos Nuevo Pemex Cogeneration Refinancing 2014 (300
Banco Nacional de Obras y Servicios Públicos Los Ramones Sur Gas Pipeline (287KM)
 Recipient Fossil Fuel
Description
Country Sector
Mexico US$239.8 million medium-term loan to finance the equity contribution for th oil and gas
Mexico The proceeds are used for the refinancing of the 300MW Nuevo Pemex cogen oil and gas
Mexico The proceeds are used for the refinancing of the 300MW Nuevo Pemex cogen oil and gas
Mexico The financing will be used for the construction, operation and maintenanc oil and gas
Mexico The proceeds are used for the refinancing of the 300MW Nuevo Pemex cogen oil and gas
Mexico The financing will be used for the construction, operation and maintenanc oil and gas
 Stage Value Period Source
upstream 33000000 2013 https://ijglobal.com/data/transaction/28219/grupo-r-rig-financing-2013
downstream 50000000 2014 https://ijglobal.com/data/transaction/28295/300mw-nuevo-pemex-cogeneration-
downstream 75000000 2014 https://ijglobal.com/data/transaction/28295/300mw-nuevo-pemex-cogeneration-
downstream 122900000 2014 https://ijglobal.com/data/transaction/26432/287km-los-ramones-sur-gas-pipeline
downstream 327000000 2014 https://ijglobal.com/data/transaction/28295/300mw-nuevo-pemex-cogeneration-
downstream 233500000 2014 https://ijglobal.com/data/transaction/26432/los-ramones-sur-gas-pipeline-287km
-r-rig-financing-2013
w-nuevo-pemex-cogeneration-ref
w-nuevo-pemex-cogeneration-ref
m-los-ramones-sur-gas-pipeline
w-nuevo-pemex-cogeneration-ref
mones-sur-gas-pipeline-287km
Public finance international (full) (USD - except where otherwise indicated)

No international public financing for fossil fuel production was identified from Mexico in 2013 and 20
fied from Mexico in 2013 and 2014.