This is Mexico's first EITI Report, covering the fiscal year of 2016 for its extractive industries.
The Government had confirmed its intention to join the EITI in January 2015. The EITI Board has approved Mexico’s EITI candidature application at the Board meeting in Manila in October 2017.
Mexico is the second largest economy in Latin America. Mexico's $2.2 trillion economy has become increasingly oriented toward manufacturing while the extractive sector still is the single most important sector. According to the IMF, natural resources account for 15% of total exports and contribute with 36% of total revenues. Mexico has 0.5% of the world's total oil reserves.
In 2013, Mexico passed a constitutional reform to allow, for the first time in almost a century, private investment in the Mexican oil and gas sector. One of the central aims of the reforms was to bring transparency to how the sector is managed. From awarding licenses to collecting revenues from the companies to the use of those revenues, the reforms sought to embed transparency in government practices and systems. Since 2016, Mexico has conducted a series of bidding rounds to allocate oil and gas blocks.
The EITI addresses a range of issues relevant to the outlook for the oil, gas and mining sectors, including license allocation, production data, tax transparency, the role of state owned enterprises, and the allocation of the revenues, including to the recently created Mexican National Oil Fund.
Legal and fiscal regime
The hydrocarbons regulator CNH (Comisión Nacional de Hidrocarburos) has worked with the Natural Resource Governance Institute (NRGI) in identifying the best practices for transparency in contract management.
See the recommendations here.
2016 EITI Report
The report was completed in December 2018. Approval of the report by the multi-stakeholder group is pending. A draft report is available here.
The report covers five revenue streams from the hydrocarbon sector and five from the mining sector that were reconciled:
Hydrocarbon (collected by the Tax Office SAT and the Mexican Petroleum Fund FMP)
- Profit sharing rights
- Hydrocarbons extraction rights
- Hydrocarbons exploration rights
- Income tax
- Tax on exporation and extraction
Mining (collected by the Tax Office SAT)
- Income Tax
- Mining Rights
- Special mining rights
- Extraordinary mining rights
- Aditional mining rights
Additionally, the report included (unilaterally disclosed by the government) six minor revenue streams in the hydrocarbon sector and four in the mining sector.
State-owned enterprise PEMEX
- Grupo Mexico
- Agnico Eagle
- Plata Panamericana
- Alamos Gold
- Peña Colorada
- Argonaut Gold
- New Gold
Main findings of the reconciliation of 2016 revenues:
Total revenues received by the government from participating companies (in USD):
Hydrocarbons: 18.30 billion (96.5 % of total reconciled revenues, 100% of total oil and gas revenues received by the government)
Mining: 0.67 billion ( 3,5 % of total reconciled revenues, 53 % of total mining revenues received by the government)
Total: 18.97 billion
By 2020, all EITI countries have to ensure that companies that apply for or hold a participating interest in an oil, gas or mining license or contract in their country disclose their beneficial owners. The EITI Standard also requires public officials – also known as Politically Exposed Persons (PEPs) to be transparent about their ownership in oil, gas and mining companies.
The government of Mexico has committed to map and identify beneficial ownership of the companies operating in the country and explore the methodology and extent of contract transparency. Mexico submitted its beneficial ownership roadmap as part of the candidature application in September 2017.