Petroleos Mexicanos Act

Original Language Title: Ley de Petróleos Mexicanos

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SECOND SECTION

ENERGY SECRETARY

DECREE issued by the Mexican Petroleum Law and the Federal Electricity Commission Law, and various provisions of the Federal Law of ParaState Entities are reformed and repealed; the Law of Acquisitions, Public Sector Leases and Services and the Public Works and Services Act Related to the Mismas.

On the sidelines a seal with the National Shield, which reads: United Mexican States.-Presidency of the Republic.

ENRIQUE PEÑA NIETO, President of the United Mexican States, to its inhabitants known:

That the Honorable Congress of the Union, has served to address the following

DECREE

"THE GENERAL CONGRESS OF THE MEXICAN UNITED STATES, DECREES:

THE MEXICAN PETROLEUM LAW AND THE FEDERAL ELECTRICITY COMMISSION ACT ARE ISSUED, AND VARIOUS PROVISIONS OF THE FEDERAL LAW OF PARASTATAL ENTITIES ARE REFORMED AND REPEALED. ACQUISITIONS, LEASES AND SERVICES OF THE PUBLIC SECTOR AND THE LAW OF PUBLIC WORKS AND RELATED SERVICES.

ARTICLE FIRST. The Mexican Petroleum Law is issued.

MEXICAN OIL LAW

TITLE FIRST

OF MEXICAN OIL COMPANIES AS A PRODUCTIVE STATE ENTERPRISE

Article 1.- This Law is a Regulation of Article 25, fourth paragraph of the Constitution and of the Transitory Twentieth of the Decree for which various provisions of the Constitution are amended and added. Political Constitution of the United Mexican States, in Matter of Energy, published in the Official Journal of the Federation on December 20, 2013, is in the public interest and aims to regulate the organization, administration, operation, operation, control, evaluation and accountability of the State's productive enterprise Petroleos Mexicanos, as well as establishing its special regime in terms of:

I.               Subsidiary production companies and subsidiary companies;

II.              Remuneration;

III.             Acquisitions, leases, services and works;

IV.            Goods;

V.             Responsibilities;

VI.            State Dividend;

VII.           Budget, and

VIII.          Debt.

Article 2.- Petroleos Mexicanos is a State-owned production company, owned exclusively by the Federal Government, with its own legal personality and its own assets and will enjoy technical, operational and management, in accordance with the provisions of this Law.

Petroleos Mexicanos will have its registered office in the Federal District, without prejudice to the fact that, for the development of its activities, it can establish conventional homes, both in national territory and in the foreign.

Article 3.- Mexican Petroleum will be subject to the provisions of this Law, its Rules of Procedure and the provisions deriving therefrom. Commercial and civil law will be supplanted.

The provisions contained in the other laws that apply to them shall apply as long as they do not object to the special arrangements provided for in this Law.

In case of doubt, the interpretation that privileges the best realization of the ends and object of the Mexican Petroleum will have to be favored according to its legal nature of productive company of the State with special arrangements, as well as the corporate governance regime that it enjoys under this order, so that it can compete effectively in the energy industry.

Article 4.- Petroleos Mexicanos aims at the development of business, economic, industrial and commercial activities in terms of its object, generating economic value and profitability for the Mexican state as its owner, as well as act transparently, honestly, efficiently, with a sense of equity and social and environmental responsibility, and seek to improve productivity to maximize the state's oil income and contribute to national development.

Article 5.- Mexican Petroleum is intended to carry out, in terms of applicable legislation, the exploration and extraction of oil and solid, liquid or hydrogen hydrogen gaseous as well as their collection, sale and marketing.

Also, Mexican Petroleum will be able to carry out the following activities:

I.               The refining, processing, transport, storage, distribution, sale, export and import of oil and hydrocarbons and the products obtained from their refining or processing and their waste, and the supply of services related to such activities;

II.              The gas processing and industrial and commercial activities of petrochemicals;

III.             The development and execution of engineering, research, geological, geophysical, monitoring, service provision to third parties and all those related to exploration, extraction and other activities they are part of their object, at market prices;

IV.            The research, development and implementation of energy sources other than those derived from hydrocarbons that allow it to meet its object, as well as the generation and marketing of electric power according to the applicable provisions;

V.             The research and technological development required for the activities carried out in the oil, petrochemical and chemical industries, the marketing of products and technological services resulting from the research, as well as the formation of highly specialized human resources; these activities may be carried out directly, through the Mexican Petroleum Institute, or through any specialized third party;

VI.            The use and management of buildings, industrial property and the technology available to them;

VII.           The placing on the market of proprietary products through marketing networks, as well as the provision of services linked to their consumption or use;

VIII.          The acquisition, holding or participation in the stock composition of companies with a similar object, analogous or compatible with their own object, and

IX.            The other activities necessary for the compliance of the object.

Petroleos Mexicanos will be able to carry out the activities referred to in this article in the country, in its exclusive economic zone or abroad.

Article 6.- Petroleos Mexicanos will be able to carry out the activities, operations or services necessary for the fulfillment of its object by itself; with support from its productive companies and subsidiaries, or through the conclusion of contracts, agreements, alliances or associations or any legal act, with natural or moral persons from the public, private or social, national or international sectors, all in terms of indicated in this Law and the other applicable legal provisions.

Article 7.- To comply with its object, Mexican Petroleum may hold with the Federal Government and with natural or moral persons all kinds of acts, conventions, contracts, and subscribe to to grant all types of guarantees, keeping the Mexican State exclusive of the property on the hydrocarbons found in the subsoil, subject to the applicable legal provisions. Petroleos Mexicanos shall be entitled to carry out the operations directly or indirectly related to its object.

The contracts and, in general, all legal acts held by Mexican Petroleum for the fulfillment of its object may include any of the terms permitted by the commercial and common law and they must comply with the applicable rules in the relevant matters.

Article 8.- Petroleos Mexicanos will not be able to hold with third-party contracts for the Exploration and Extraction referred to in the Hydrocarbons Law and the Law of Revenue on Hydrocarbons, except with the National Hydrocarbons Commission, either individually or through association or with the participation of individuals. Consequently, in those activities Mexican Petroleum must be subject to the provisions of Articles 13 and 14 of the Law on Hydrocarbons.

The persons with whom the Mexican Petroleum Company holds acts or contracts under no circumstances shall have the right to register as their own assets the oil reserves that belong exclusively to the Nation; is an impediment to such persons being able to report the economic interest which, if any, represents the act or contract.

Article 9.- Mexican Petroleum may report for accounting and financial purposes the allocations and contracts granted to it by the Federal Government, as well as its expected benefits, as long as it is affirm in the own assignment or contract that the hydrocarbons found in the subsoil are the property of the Nation.

Article 10.- The wealth of Mexican Petroleum shall be constituted by the goods, rights and obligations that it has acquired or has been assigned, transferred or awarded; any legal title, budget or donations, as well as the income from its operations and the income it receives for any other concept.

TITLE SECOND

CORPORATE GOVERNANCE

CHAPTER I

ORGANIZATION

Article 11.- Mexican Petroleum will have the organization and corporate structure that best suits the performance of its object, as determined by its Board of Directors in terms of this Act.

The organization and structure referred to should address the optimization of human, financial and material resources; simplification of processes; efficiency and transparency and the adoption of better corporate and business practices at the national and international level, ensuring their technical and managerial autonomy.

Article 12.- Mexican Petroleum will be managed and managed by:

I.               A Board of Directors, and

II.              A General Manager.

CHAPTER II

ADMINISTRATION TIP

First Section

Functions

Article 13.- The Board of Directors, the supreme authority for the administration of Mexican Petroleum, will be responsible for defining the policies, guidelines and strategic vision of Mexican Petroleum, its subsidiary production companies and their subsidiary companies. You will have the following functions:

I.               The central leadership and strategic direction of the business, economic and industrial activities of Mexican Petroleum, its subsidiary production companies and subsidiary companies;

II.              Establish general guidelines, priorities and policies regarding production, productivity, marketing, technological development, research, general administration, safety, health and environmental protection, finance, budget and others related to the activities of Mexican Petroleum;

III.             Approve, revise and, where appropriate, update the Business Plan of Mexican Petroleum and its subsidiary production companies annually, based on a projection to five years, and, according to it, the operational and financial program year;

IV.            Approve the guidelines, priorities and general policies related to the investments of Mexican Petroleum, its subsidiary production companies and subsidiary companies, and with the celebration of strategic alliances and partnerships with natural or moral persons, and must, in both cases, indicate those that are of importance or importance to be authorized by the Council itself;

V.             Approve, on a proposal from the Director General, the general guidelines, provisions and policies for the hiring carried out by Petroleos Mexicanos, its subsidiary production companies and subsidiary companies, which because of their importance or importance must be authorised by the Council itself;

VI.            Approve annually, after favorable opinion of the Audit Committee on the opinion of the external auditors, the financial statements of Mexican Petroleum;

VII.           To fix and adjust the prices of goods and services that produce or lend Mexican Petroleum and its subsidiary production companies, or, the rules for that effect, except those that are to be determined in terms of the laws of the subject;

VIII.          Dictate the rules for the annual accounting and financial consolidation of subsidiary production companies and subsidiaries of Mexican Petroleum;

IX.            Approve the maximum economic forecasts for the collective bargaining contract negotiations applicable in Mexican Petroleum and its subsidiary production companies;

X.             Approve the human resources and remuneration policies of Mexican Petroleum and its subsidiary production companies, subject to the provisions of Chapter VII of Title IV and other applicable provisions of this Law;

XI.            Approve general policies to cancel debits from third parties and in favor of Mexican Petroleum and its subsidiary production companies, when there is economic infeasibility or practical impossibility of its collection, as well as policies for the granting of mutual guarantees, guarantees, loans or any type of credit and for the exemption of such guarantees;

XII.           Approve, as appropriate, the constitution of accounting reserves of Mexican Petroleum, its subsidiary production companies and, where appropriate, subsidiary companies, as well as the investment requirements thereof;

XIII.          Approve the criteria and guidelines for the granting of extraordinary payments, donations and donations, in cash or in kind, to be carried out by Mexican Petroleum, its subsidiary production companies and subsidiary companies;

XIV.          Approve and issue, on a proposal from the Director General, the policies for the payment of compensation and consideration that will be able to pay Mexican Petroleum or its subsidiary productive companies to third parties, to fulfill its object;

XV.           To establish the policies, bases, guidelines and procedures for the dismantling, the disposal, the affectation in guarantee or the taxation of the industrial installations of Mexican Petroleum, its subsidiary productive companies or, where applicable, subsidiary undertakings;

XVI.          Approve and issue, on a proposal from the Director General, the Organic Statute of Mexican Petroleum, which will contain the basic structure and organization and the functions that correspond to the different areas and lines of business that make up the company, as well as the directors or employees who will have the representation of the company and those who will be able to grant powers on behalf of the company and the operating rules of the Board of Directors and its committees;

XVII.         Approve the reports presented by the Director General, as well as evaluate their performance annually, taking into consideration, among other elements, the strategies contained in the Business Plan of Mexican Petroleum;

XVIII.        To monitor and evaluate the performance of Mexican Petroleum, its subsidiary production companies and subsidiary companies and their management;

XIX.          To issue, on the proposal of the Audit Committee, the guidelines on audit and performance evaluation, applicable to Mexican Petroleum, its subsidiary production companies and subsidiary companies;

XX.           To issue, on the proposal of the Audit Committee, the guidelines that regulate the internal control system applicable to Mexican Petroleum, its subsidiary production companies and subsidiary companies, which will include the administration of risks, and monitor its implementation, based on the information presented by the Committee itself, the Director General, the Internal Audit Office or the external auditor, paying particular attention to the main strategic risks;

XXI.          Evaluate and follow up on accounting, control, security and auditing, recording, archiving, and information systems and their disclosure to the public;

XXII.         Set the policies and general bases to determine the profitability factor based on which Mexican Petroleum and its subsidiary productive companies will participate in the competitions for the award of contracts for the Exploration And Extraction of Hydrocarbons;

XXIII.        Approve the projects and decisions whose characteristics are of strategic importance for the development of the object of the company, in accordance with the policies and guidelines that the Board of Directors will issue to the effect;

XXIV.       Approve, on a proposal from the Director General, the celebration of partnerships and alliances in terms of Articles 13 and 14 of the Hydrocarbons Law;

XXV.        Appoint and remove, on a proposal from the Director General, the managers of Mexican Petroleum who occupy positions in the two immediate hierarchies inferior to that of the one, and grant them licenses;

XXVI.       To know and, where appropriate, to authorize matters which, due to their importance or importance, are subject to their consideration by their President, at least two members through the latter or the Director General;

XXVII.      Approve the policies and procedures for the holding of operations between Mexican Petroleum, its subsidiary production companies, subsidiary companies, or other persons on whom it exercises control or significant influence, owing identify those to be authorised by the Council itself;

XXVIII.     Establish coordination mechanisms between the Responsibilities Unit and Internal Audit, and

XXIX.       The others provided for in this Law, in the Organic Statute and those established by the Board of Directors, as well as other applicable legal systems.

Article 14.- The Mexican Petroleum Business Plan will be developed and updated with a five-year horizon, and will contain at least:

I.               The company's goals, lines, and business opportunities;

II.              The main commercial, financial and investment strategies, large-scale projects and technological improvement, as well as priority acquisitions;

III.             A diagnosis of their operational and financial situation, as well as performance and performance indicators, and

IV.            The main strategic and commercial risk scenarios of the company, considering, among other aspects, the performance of the economy in the long term, technological innovations, trends in supply and demand and changes Geopolitical.

Petroleos Mexicanos will broadcast on its website a public version of its Business Plan, which should not contain any information that might compromise or risk its strategies. commercial.

Section Second

Integration and Operation

Article 15.- The Board of Administration will consist of ten counselors, as follows:

I.               The head of the Energy Secretariat, who will chair and have a vote of quality and the head of the Secretariat of Finance and Public Credit;

II.              Three Federal Government advisers appointed by the Federal Executive, and

III.             Five independent directors, appointed by the Federal Executive and ratified by the Senate of the Republic, who will exercise their part-time functions and will not have the character of public servants.

For the purposes of the provisions of the previous section III, the Federal Executive will send the designation accompanied by the documentation certifying compliance with the requirements to fill the position. The Chamber of Senators shall, where appropriate, ratify by a favourable vote of two-thirds of its members present, the respective designation, without the appearance of the appointed person, within the term of 30 days. natural following the receipt of the appointment.

If the above votes are not reached or the Chamber of Senators does not resolve within the indicated period, the respective appointment will be deemed to be rejected, in which case the Federal Executive will send a new designation for ratification of the Chamber of Senators, in terms of the previous paragraph. If this second designation is also rejected under this paragraph, the Federal Executive will make the appointment of the independent counsel directly.

The deadline provided for in the previous two paragraphs will always be provided by the Senate of the Republic in sessions.

In the designation of the members mentioned in fractions II and III, it will be ensured that the composition of the Board of Directors is diversified, according to the preparation, experience and capacity of its members.

Members of the Board of Directors shall have the human and material resources necessary for the performance of their duties, in accordance with the rules issued by the Council.

Article 16.- The counselors referred to in Article 15 (II) may be federal public servants.

The members referred to in Sections II and III of Article 15 may carry out other public or private employment, positions or commissions, except those involving a conflict of interest in terms of the Regulation.

The members referred to in Article 15 (III) shall not, during the time of their management, occupy a job, position or commission of any kind, in federal, local or national governments. municipal.

Article 17.- The members mentioned in section I of Article 15 may be replaced by the public servant who, with the minimum level of deputy secretary, are appointed to the effect. In the case of the President of the Council, his alternate shall assume all the duties of the Council, with the exception of the vote of quality in the event of a tie in the votes.

The members referred to in Article 15 (II) and (III) shall not have alternates and shall exercise their duties in a personal capacity.

Only in cases where a Federal Government adviser is Secretary of State, he may appoint his alternate to the meetings of the Board of Directors, with a minimum level of deputy secretary. In the case of meetings of committees, the Secretary of State may appoint a number of alternate members with a minimum level of two hierarchies lower than that of the latter. The above will also be applicable in the case of the secretaries of energy and finance and public credit.

Article 18.- Public servants who are members of the Board of Directors will act impartially and for the benefit and best interest of Mexican Petroleum, separating at all times the interests of the Secretariat of State, dependency or entity to which they belong, and therefore they shall not be understood to perform their duties or vote in their representation.

Article 19.- The information and documents related to the appointment of directors shall be of a public nature and shall be available for consultation of any interested party, as indicated in the Regulation and taking into account the applicable regulation on personal data.

Article 20.- Advisers, with the exception of those mentioned in Article 15 (I), must be designated by reason of their experience, capacity and professional prestige and meet the requirements following:

I.               Have a professional title in the areas of law, administration, economy, engineering, accounting or related matters to the hydrocarbon industry, with an age of not less than five years per day of designation;

II.              Have performed, for at least ten years, in activities that provide the necessary experience to fulfill the functions of the Mexican Petroleum Advisor, whether in the professional, teaching, or research;

III.             Not having been convicted by a firm sentence for a crime that imposes prison sentences on you. Dealing with wilful property crimes, whatever the penalty may have been;

IV.            Not to be found, at the time of appointment, to be administratively disabled or suspended or, where appropriate, criminally, to exercise trade or to perform a job, post or commission in the public service;

V.             Do not have pending litigation with Mexican Petroleum, its subsidiary production companies or any of its subsidiary companies, and

VI.            Not to have been sanctioned on the grounds of an investigation of an administrative nature, for serious or criminal offences, for violations of national or foreign laws, which have had the conclusion of any kind of resolution or an agreement that expressly implies acceptance of the fault or responsibility, or a firm conviction.

Persons who prior to their designation have been counsellors in competing companies of Mexican Petroleum, their subsidiary production companies or subsidiary companies, or who have lent them advisory or representation services, should disclose such circumstance to the Federal Executive. Failure to comply with this obligation will result in immediate removal, without prejudice to the responsibilities to be taken.

In cases where a Federal Government Counselor is a Secretary of State, you will not need to meet the requirements outlined in this article.

Article 21.- The independent directors referred to in Article 15 (III) of this Law shall be appointed considering that they may perform their functions without conflict of interest and without be subject to personal, economic or economic interests. In addition to the requirements set out in the previous Article, they shall meet the following:

I.               Not having been employed by Mexican Petroleum or any of its subsidiary production companies or subsidiary companies in the two years prior to the appointment, or previously removed from the position of an adviser, unless this last was the result of physical incapacity already exceeded;

II.              Not having held the position of external auditor of Mexican Petroleum or any of its subsidiary production companies or subsidiary companies, during the twelve months prior to the date of appointment;

III.             Not to have been a public servant of any level of government or to have held positions of popular choice or political leaders in any political party, in the immediate two years prior to the day of the designation;

IV.            Do not be a customer, service provider, supplier, contractor, debtor or important creditor of Mexican Petroleum or any of its subsidiary production companies or subsidiary companies, as well as a shareholder, adviser, adviser or employee of a moral person who is a customer, service provider, supplier, contractor, debtor or important creditor of Mexican Petroleum or any of its subsidiary production companies or subsidiary companies.

A customer, service provider, supplier, contractor, debtor or creditor is considered to be important, when their income derived from relationships commercial with Petroleos Mexicanos, some of its subsidiary productive companies or subsidiary companies, account for more than ten percent of the total sales or assets of the latter, during the twelve months prior to the date of the appointment;

V.             Do not have parentage by consanguinity, affinity or civil to the fourth degree, as well as not being a spouse, concubine or concubinaire, of any of the natural persons referred to in fractions I, II and IV of this article, and

VI.            Do not belong simultaneously to more than four boards or administrative bodies of different moral, public or private persons, including those of Mexican Petroleum; or to exercise a simultaneous employment, position or commission prevent the proper exercise of your independent counsel function.

The independent directors who, during their assignment, cease to comply with any of the requirements mentioned in this Law or overcome any obstacles, must do so with the knowledge of the Federal Executive, for this to be resolved.

Article 22.- The period of the independent directors shall be five years, staggered and annual succession and may be reappointed for an additional period.

Counselors covering vacancies that occur before the termination of the respective period will last only the time that will be missing from the replacement, and may be reappointed for a period of time. additional.

Independent counselors may only be removed by the causes and in accordance with the procedure provided for in this Law.

Article 23.- The counsellors referred to in Article 15 (II) may be discretionally removed by the Federal Executive at any time.

Article 24.- The directors will not have any employment relationship by virtue of their position with Mexican Petroleum, their subsidiary companies or subsidiary companies, or with the Federal Government.

Federal Government advisers who are not public servants, as well as independent directors, will receive the remuneration that will be determined by a special committee that will be composed of two representatives of the Secretariat of Finance and Public Credit and a representative of the Secretariat of Energy, all with a minimum level of deputy secretary, who will have no alternates.

The special committee will meet at least once a year and will take its resolutions unanimously. In order to adopt its resolutions, the committee will have to consider the remuneration existing in Mexican Petroleum and the evolution of the remuneration in the national and international energy sector, having as a guiding criterion that, given the conditions of the labour market, the Board of Directors has suitable members to fulfil its tasks.

Public servants who are appointed as Federal Government advisers will receive no remuneration for the performance of this function. However, they will have the same duties, responsibilities and rights as other councillors.

Article 25.- The Board of Directors shall appoint, on a proposal from its Chairman, the Secretary of the Board.

Article 26.- The Board of Directors, with the favorable vote of seven of its members, shall issue and update the rules for its operation and operation, and shall, in any event, provide that:

I.               Session on a regular basis on a quarterly basis, in accordance with the timetable agreed upon, upon request by the Secretary of the Council, to the President's indication;

II.              The sessions shall be held at the legal domicile of Petroleos Mexicanos, without prejudice to the fact that, in the opinion of the President of the Council, they may be held at another address;

III.             The sessions shall be valid with the presence of at least six members, provided that at least two independent advisors are present;

IV.            The quorum of attendance for the sessions of the Board of Directors shall be determined at the beginning of the sessions and shall be maintained for the development of the session;

V.             Deliberates in a collegiate manner and its decisions shall be adopted by a majority of votes of the members present, unless the law or the rules referred to in this article require a qualified majority. The President shall have a vote of quality in case of a tie.

If the majority of votes are not reached with the favourable vote of at least two independent directors, no later than 20 working days, the members who object may cast their reasoned vote. The case shall be decided by a simple majority of votes of the members present at the next sitting at the end of the period referred to;

VI.            All members shall vote in a positive or negative way, without the possibility of abstaining from voting, except as provided in the following paragraph. In the event that the vote is negative, the counselor must express the reasons for his/her issuance in the same session, which will be settled in the respective minutes.

If any counselor is in a situation that generates or can generate conflict of interest, he will have the obligation to communicate it to the President of the Council and the other members of the session attending the sitting and shall temporarily leave the relevant session to refrain from knowing the subject matter and to participate in the deliberation and resolution of the matter;

VII.           Without prejudice to the timetable agreed for ordinary sessions, the President of the Council or at least two members may instruct the Secretary of the Council to convene an extraordinary session.

The President of the Board of Directors will decide on the requests that the Director General of Mexican Petroleum will present to the an extraordinary session;

VIII.          Terms and terms for ordinary and extraordinary calls for meetings;

IX.            The regulation on the participation of guests in the sessions, which will have a voice but no vote. The Director General of Mexican Petroleum and the Commissioner referred to in Article 117 of this Law will attend as permanent guests;

X.             The use of information technologies for the call to sessions and remote media of audiovisual communication for its celebration if necessary, and

XI.            The functions of the Chairman and Secretary of the Board of Directors.

Article 27.- The members of the Board of Directors, in accordance with the rules that they issue, may request, through the Director General, the information necessary for the decision-making in the exercise of its functions, which shall be delivered or made available within the time limits set by the Council itself.

Article 28.- Directors, Secretary and guests of the Board of Directors are required to keep confidentiality, as well as not disclose, protect and care for documentation and information. of which, by reason of their participation in the Board of Directors, they are aware or are under their responsibility, as well as to prevent and prevent their use, removal, destruction, concealment or improper use.

The obligation of confidentiality will remain in force five years after the obligation to it cease to provide its services or to work for Mexican Petroleum, except in the case in which provide their services, work or have any commercial, corporate or advisory links with natural or moral persons, national or foreign, that carry out activities related to the object of Mexican Petroleum, in which case the confidentiality obligation shall remain in force for as long as it lasts such a commercial, employment or any nature relationship.

Article 29.- The decisions and minutes of the Board of Directors and their committees shall be public as a general rule, but may be reserved in whole or in part, in accordance with the policies that the the Council itself, in terms of the legal provisions applicable to the matter, shall be determined by the Council.

Mexican Petroleos Mexicanos will broadcast on its website the respective minutes and agreements, in terms of the previous paragraph.

Third Section

Counsellors ' Responsibility Regime

Article 30.- Advisers, in relation to the exercise of their duties as members of the Board of Directors, shall be solely responsible in terms of the provisions of this Law, shall not be subject to the liability regime laid down in the Federal Law on Administrative Responsibilities of Public Servants or in any other order or arrangement applicable in general to public servants of a character federal.

Article 31.- Advisers will be responsible for:

I.               The damages to be caused to Mexican Petroleum or any of its subsidiary companies or subsidiary companies, derived from the acts, acts or omissions in which they incur, and

II.              The damages to be caused by the violation of his obligations and the duties of diligence and loyalty provided for in this Law.

The liability referred to in the above fractions shall be in solidarity between the persons who have taken the decision.

The corresponding compensation must cover the damages caused to Petroleos Mexicanos, its subsidiary production companies or subsidiary companies and, in any case, the removal of the counselor involved.

The action to require the liability referred to in this Article shall be prescribed in five years from the day on which the act, act or omission which caused the damage has taken place. injury, except in the case of acts, acts or omissions of the following or continuing purposes, in which case the limitation period shall begin to be counted at the end of the last act, act or omission or cease the continuous effects, corresponds.

Regardless of the criminal liability to which there is a place, the damages caused by the councilors to the detriment of Mexican Petroleum or any of its subsidiary productive companies or subsidiary undertakings, for the acts, acts or omissions in which they incur, may be claimed by the civil route.

Article 32.- Advisers must perform their duties with the following obligations:

I.               Refrain from carrying out, on its own or by person, professional or commercial transactions with Mexican Petroleum, its subsidiary production companies or subsidiary companies, or to use its assets, resources or personnel to private activities;

II.              Participate in the committees that constitute the Board of Directors and perform with the opportunity and professionalism the matters entrusted to it or delegated to its attention;

III.             Support the Board of Directors through opinions, recommendations and guidance that result from the analysis of the performance of Mexican Petroleum, and

IV.            fulfil the duties of due diligence and loyalty, respectively, in the following two articles, as well as the other obligations under this Law.

Article 33.- Members of the Board of Directors will fail to do their duty of care for any of the following assumptions:

I.               To be absent or to abandon, without justification to the judgment of the Board of Directors, the sessions of the Board, or to those of the committees of which they are a party;

II.              Not to disclose, to do so partially or to distort, to the Board of Directors or, where appropriate, to the committees of which they are a party, relevant information that they know and that is necessary for the proper decision making in such organs, except that they are legally or contractually obliged to keep or reserve confidentiality and that such reservation does not constitute a conflict of interest with Mexican Petroleum, its subsidiary companies or companies subsidiaries, and

III.             Failure to fulfil the duties imposed on them by this Act or other applicable provisions.

Article 34.- Members of the Board of Directors will fail to be loyal to any of the following assumptions:

I.               When, without legitimate cause, by virtue of their duties as counselors, they obtain economic benefits for themselves or to procure them in favor of third parties;

II.              Attend the sessions of the Board of Directors or their committees when they are to be excused, or vote on, or make determinations related to the assets of Mexican Petroleum or any of its productive companies. subsidiaries or subsidiaries, despite the existence of a conflict of interest;

III.             Take advantage of or approve in favor of third parties, the use or enjoyment of the goods of Mexican Petroleum, its subsidiary production companies and subsidiary companies, in violation of the policies approved by the Council of Administration;

IV.            Use, for their own benefit or any third party, the information that they have in order to exercise their functions or disclose it in contravention of the applicable provisions;

V.             Generate, disseminate, publish or provide information from Mexican Petroleum or any of its subsidiary production companies or subsidiary companies, knowing that it is false or misleading; or some of these behaviors;

VI.            Order that the registration of transactions carried out by Mexican Petroleum or any of its subsidiary companies or subsidiary companies be omitted, or alter or order to alter the records to conceal the true nature of the transactions held, affecting any concept of financial statements; or order or accept that false data be entered in the relevant accounts or intentionally carry out any unlawful or prohibited act or operation create a bankruptcy, damage or damage to the assets of Mexican Petroleum or any of its Subsidiary production companies or subsidiary companies;

VII.           Hide or omit to disclose relevant information which, in terms of this order and other applicable provisions, must be disclosed, delivered to the Federal Executive, to the Congress of the Union or to any competent body, except in terms of the applicable provisions are required to keep or reserve confidentiality;

VIII.          Destroy or modify, by itself or through third parties, in whole or in part, the accounting systems or records or the documentation that originates from the accounting entries of Mexican Petroleum or any of its production companies subsidiaries or affiliated companies, prior to the expiration of the legal retention periods and for the purpose of concealing their registration or evidence;

IX.            Destroy, in whole or in part, information, documents or files, including electronic, for the purpose of preventing or obstructing the acts of supervision, or of manipulating or concealing data or relevant information from Petroleum Mexicans or any of their subsidiary companies or subsidiary companies, to whom they have a legal interest in meeting them;

X.             Present documents or false or altered information to the authorities, and

XI.            Make improper use of information relating to Mexican Petroleum or any of its subsidiary production companies or subsidiary companies.

Article 35.- The councilors shall be jointly and severally liable with those who have preceded them in the position, for the irregularities in which they may have incurred, if they know, not to communicate them to the Audit Committee.

Advisers shall be required to report to the Audit Committee the irregularities of their knowledge in the performance of their duties.

Article 36.- The members of the Board of Directors shall not, individually or as a whole, incur liability for any damages that may be caused to Mexican Petroleum or any of the its subsidiary production companies or subsidiary undertakings, arising from the acts or omissions they implement or the decisions they take, when acting in good faith any of the following cases shall be updated:

I.               Meet the requirements for the approval of the matters to be known to the Board of Directors or, where appropriate, to the committees of which they are a party;

II.              Make decisions or vote in the sessions of the Board of Directors or, where appropriate, committees to which they belong, based on information provided by managers of Mexican Petroleum or its subsidiary production companies or subsidiaries, external auditors or independent experts, or

III.             You have selected the most appropriate alternative, to your best knowledge and understanding, or the negative heritage effects have not been foreseeable; in both cases, based on the information available at the time of the decision.

Section Fourth

Counselors ' emotion

Article 37.- The members of the Board of Directors referred to in Article 15 (III) shall be removed from their positions in the following cases:

I.               For mental or physical incapacity to prevent the correct exercise of their functions for more than six continuous months;

II.              Failure to comply with the agreements and decisions of the Board of Directors without any justified cause;

III.             Deliberately or without justification to comply with the obligations, duties of diligence or loyalty or responsibilities established by this Law;

IV.            Failure to comply with any requirement that the Law points out to be a member of the Board of Directors or to prevent them from being prevented;

V.             Do not excuse yourself from knowing and voting on matters in which they have a conflict of interest, and

VI.            Miss consecutively to three sessions or not attend at least seventy-five per cent of sessions held in a year.

Article 38.- The Federal Executive shall determine, on the basis of the elements presented to it or to be prescribed for that purpose, the removal of the independent directors in the cases referred to in the Previous article.

The determination referred to will be sent to the Senate of the Republic for approval by the vote of the absolute majority of its members present, within the imextendable period of thirty calendar days. The time limit referred to shall always be that the Chamber of Senators is in session.

Article 39.- In the event that the cause that has motivated the removal of the counselor concerned, involves the possible commission of a crime or carries damage or property damage to Petroleum Mexicans, their subsidiary production companies or subsidiary companies, the complaints of facts and complaints shall be filed or the appropriate legal actions shall be exercised.

Fifth Section

Committees

Article 40.- The Board of Directors will have the committees that the effect establishes. In any case, it will have the committees:

I.               Audit;

II.              Human Resources and Remuneration;

III.             Strategy and Investments, and

IV.            Acquisitions, Leases, Works, and Services.

Article 41.- The Board of Directors ' committees shall be composed of a minimum of three and a maximum of five directors, of which at least two shall be independent, except those whose integration is expressly provided for in this Law. They shall be chaired and shall have the integration and functions to be determined by the Board of Directors, by resolution adopted by a majority of seven of its members, without prejudice to those mentioned in this Law, and shall operate in accordance with the rules of the Council.

The Committees may ask the Director-General for all the information they require for the proper performance of their duties, which must be delivered or made available within the time limit. determine the Board of Directors in the rules outlined in the preceding paragraph.

The Committees may authorize the assistance of a representative of the Director General to their sessions, as a guest with a voice but without a vote, when they consider it appropriate for the exercise of their duties.

Article 42.- The Audit Committee shall be composed of three independent directors and shall be chaired, on a rotating basis each year, by one of them, as determined by the Board of Directors. The Committee shall have the functions referred to in Article 51 of this Law.

They may attend their sessions as guests, with a voice but no vote, a representative of the Director General; the holder of the Internal Audit, the holder of the legal area, or any other person, when deemed appropriate and appropriate on the grounds of the subject to be discussed.

Article 43.- The Human Resources and Remuneration Committee shall be chaired by an independent counsel and shall be composed of at least the Secretary of Finance and Public Credit, and shall be responsible for the The following functions:

I.               Propose to the Board of Directors the remuneration mechanism of the Director General and the managers of the three hierarchical levels below;

II.              Propose to the Board of Directors the policy of hiring, evaluating the performance and remuneration of the rest of the staff of Petroleos Mexicanos, its subsidiary production companies and its subsidiary companies, must comply with the applicable legislation and collective labour contract applicable;

III.             Auxiliary to the Board of Directors, in terms of its mandate, in the monitoring of the human resources policies that it has approved;

IV.            Follow up on the fulfillment of the agreements, commitments and authorizations that, in the field of human resources, specify the Board of Directors;

V.             Propose the training, certification and updating agreements that Mexican Petroleum can subscribe to with public and private institutions, national or international, and

VI.            Other as determined by the Board of Directors.

Article 44.- The Strategy and Investments Committee will be chaired by an independent advisor on an annual basis, and will have the following functions:

I.               Auxiliary to the Board of Directors in the approval of the guidelines, priorities and general policies related to the investments of Mexican Petroleum;

II.              Analyze the Business Plan;

III.             Make recommendations to the Board of Directors related to the Business Plan and general policies in the field;

IV.            Follow up on investments that, in terms of section IV of Article 13 of this Law, have been authorized by the Board of Directors, and

V.             Other as determined by the Board of Directors.

Article 45.- The Procurement, Leases, Works and Services Committee will be chaired by an independent advisor on an annual basis, and will have the following functions:

I.               Make recommendations to the Director-General on specific aspects that may be included in the policies and provisions that, in terms of hiring, propose to the Board of Directors;

II.              To comment on the proposals that the Director General presents regarding the policies and provisions regarding hiring;

III.             Make opinions, at the request of the Board of Directors, on the hiring to be submitted to it, in terms of the applicable provisions;

IV.            To follow up on acquisitions, leases, services and works which, in terms of section V of Article 13 of this Law, have been authorized by the Board of Directors;

V.             Approve the cases in which the exception to the public tender procedure is granted for Petroleos Mexicanos and its subsidiary companies to contract with subsidiaries of Mexican Petroleum;

VI.            Review the annual procurement, lease, service and works programs and formulate recommendations that are relevant to the Board of Directors, and

VII.           Other as determined by the Board of Directors.

CHAPTER III

DIRECTOR GENERAL

Article 46.- Corresponding to the Director General, the management, operation, operation and execution of the objectives of Mexican Petroleum, subject to the approved strategies, policies and guidelines by the Board of Directors. You will have the following functions:

I.               Manage and legally represent the company, in terms of this Law, with the most extensive powers for acts of domain, administration, litigation and collection, including those requiring authorization, power or clause special in terms of the applicable provisions, including the employer's representation and necessary powers in the field of employment; to formulate complaints in cases of offences which can only be pursued at the request of an affected party; pardon; to exercise and desist from judicial and administrative actions, including in the trial of amparo; to engage in arbitrators and transigir; to issue, to endorse and to negotiate titles of credit, as well as to grant and revoke all kinds of general or special powers;

II.              Run the agreements and decisions of the Board of Directors;

III.             Formulate and present for the authorization of the Board of Directors the Business Plan and the annual operational and financial program of work;

IV.            Send to the Secretariat of Finance and Public Credit, in accordance with Chapter VII of Title IV and other applicable provisions of this Law, the budgetary and financial information corresponding to Petroleum Mexicans and their subsidiary production companies;

V.             Authorize extraordinary payments, donations and donations in cash or in kind that Mexican Petroleum or its subsidiary production companies grant, in terms of the guidelines issued by the Board of Directors;

VI.            Manage the assets of the company and dispose of its assets in accordance with the provisions of this Law and in the policies and authorizations that the Board of Directors will issue to the effect;

VII.           Conduct policy and establish guidelines for the programming, instrumentation and evaluation of support actions of Mexican Petroleum, its subsidiary production companies and subsidiary companies for community development sustainable, making productive activities viable;

VIII.          Convenir and subscribe to the collective agreements and union administrative agreements that regulate the labor relations of Mexican Petroleum and its subsidiary productive companies with its workers, according to the maximum forecasts approved by the Board of Directors, as well as the work regulations of the trust staff, in terms of Article 123 (A) of the Political Constitution of the United Mexican States and the Federal Law of the Job;

IX.            Instrumentation and administration of the security systems of the goods and facilities of Mexican Petroleum, its subsidiary production companies and, where appropriate, subsidiary companies, in coordination with the competent offices of the three government orders;

X.             Instrumentation and manage the safety, health and industrial safety and security mechanisms of Mexican Petroleum, its subsidiary production companies and, where appropriate, subsidiary companies, as well as the mechanisms and procedures for control the quality and continuity of industrial and commercial operations;

XI.            Lead the design and implementation of the hydrocarbon spill prevention programs, environmental contingency, soil and water remediation, and the other in terms of operational safety, ecological balance and preservation. the environment is applicable;

XII.           Constitute, dissolve and determine the functions of working groups or advisory commissions that are required for the fulfillment of the object of the company, as well as dictate the basis for its operation;

XIII.          Present to the Board of Directors an annual report on the performance of Mexican Petroleum, its subsidiary production companies and subsidiary companies, including the exercise of revenue and expenditure budgets and the (i) The report and supporting documents will contain a comparative analysis of the goals and commitments set out in the Business Plan with the results achieved;

XIV.          Give the general public, in the terms established by the Board of Directors, the financial statements under International Financial Reporting Standards;

XV.           Establish measures for technological development and to ensure the quality of their products;

XVI.          Propose to the Board of Directors any adjustments it deems necessary to the general policies of operation;

XVII.         Spread relevant information and events that need to be public in terms of applicable provisions, and

XVIII.        The others provided for in this Law, and those assigned to it by the Board of Directors, the Organic Statute or are provided for in other applicable legal systems.

Article 47.- The Director General shall be appointed by the Federal Executive. Such appointment shall be made in person who meets the requirements laid down for the members in Article 20 of this Law, as well as not being a spouse, a concubine or a concubinaire or having a parentage by consanguinity, affinity or civil, up to the fourth Degree, with any of the members of the Board of Directors.

Article 48.- The Director General may be discretionally removed by the Federal Executive or the Board of Directors, by decision taken by at least seven of its members.

The Board of Directors will decide on the license applications submitted to you by the Director General.

Article 49.- The Director-General shall inform the Federal Executive and the Board of Directors of any non-compliance with any of the requirements to be covered for its designation, as well as any impediment that overcomes you.

THIRD TITLE

SURVEILLANCE AND AUDITING

Article 50.- The surveillance and auditing of Mexican Petroleum, its subsidiary production companies and, where appropriate, subsidiary companies will be carried out by:

I.               The Audit Committee;

II.              The Internal Audit, and

III.             The External Auditor.

Article 51.- The Audit Committee will be responsible for the following functions:

I.               Propose to the Board of Directors the designation of the holder of the Internal Audit, to issue policies for the development of their activities and to evaluate their performance;

II.              To monitor the management of Mexican Petroleum, its subsidiary production companies and subsidiary companies, review the documentation concerning the evaluation of the financial and operational performance-general and function-of the company, as well as submit reports related to these topics to the Board of Directors;

III.             Verify compliance with priority goals, objectives, plans, programmes and projects, including the deadlines, terms and conditions of commitments to be undertaken, as well as establishing objective and quantifiable indicators for the performance assessment;

IV.            Verify and certify the rationability and sufficiency of accounting and financial information;

V.             Monitor processes for formulating, integrating and disseminating accounting and financial information, as well as the execution of audits to financial statements, in accordance with accounting principles and standards audit that is applicable to you;

VI.            Propose for approval of the Board of Directors, upon the opinion or request of the Director General, modifications to accounting policies;

VII.           Issue opinion on the adequacy and rationability of the external audit opinion of the financial statements;

VIII.          Authorize the hiring of the external auditor in activities other than external audit services, in order to avoid conflicts of interest that may affect the independence of its action;

IX.            Submit for approval by the Board of Directors, upon a proposal from the Director General and the opinion of the Internal Audit Office, the internal control system, as well as the guidelines that regulate it;

X.             Follow up and report to the State Board of Directors that keeps the internal control system, and propose appropriate adjustments, as well as other measures and actions to correct the deficiencies identified;

XI.            Present for approval of the Board of Directors, upon proposal of the Internal Audit, the guidelines on audit and performance evaluation;

XII.           Issue opinion on the Director-General's annual report;

XIII.          Approve the annual internal audit program at the proposal of the Internal Audit holder;

XIV.          Support the Board of Directors in drawing up the reports that the collegiate body must prepare or submit;

XV.           Schedule and require, at any time, any investigations and audits that it deems necessary, except for what it does to the Board of Directors ' performance;

XVI.          submit to the Board of Directors, with the periodicity indicated to it, reports on the results of its management, as well as the deficiencies and irregularities detected in the performance of its duties and, where appropriate, propose actions to be remedied with opportunity;

XVII.         Propose to the Board of Directors criteria for the organization, classification and management of the reports referred to in this Law;

XVIII.        Monitor the reliability, effectiveness and timeliness of the mechanisms that are implemented to address the requests for information received by the company, in terms of the applicable provisions, and to draw up an annual opinion on the transparency in Petroleos Mexicanos and its subsidiary production companies and disclosure of information pursuant to Article 110 of this Law;

XIX.          Communicate to the Council the differences of opinion or criteria that exist between the administration of the company and the Committee itself, and

XX.           The others assigned to you by the Board of Directors or be established in other applicable legal systems.

Article 52.- Internal Audit will depend on the Board of Directors, through its Audit Committee and will be the executive body of the Audit Committee. It shall act in accordance with the policies determined by the Audit Committee and shall be responsible for regularly reviewing, through the audit procedures to be determined, the policies, rules and controls established by the Audit Board. Administration for the proper functioning of Mexican Petroleum, its subsidiary production companies and, where appropriate, subsidiary companies, are applied in an appropriate manner, as well as to verify the proper functioning of the control system internal.

The Board of Directors shall ensure the independence of Internal Audit in respect of areas, divisions or lines of business.

Article 53.- Internal Audit shall be directed by a holder appointed by the Board of Directors, on a proposal from the Audit Committee.

The Internal Audit holder will be freely removed by the Audit Committee.

Article 54.- Internal Audit will have the following functions:

I.               Evaluate on the basis of the annual internal audit program approved by the Audit Committee, through audits and substantive, procedural and compliance tests, the operational functioning of Mexican Petroleum, its companies Subsidiaries and, where appropriate, subsidiary companies, the appropriate application of the policies established by the Board of Directors, compliance with applicable legal provisions, as well as verifying, in the same way, the correct operation of the internal control system;

II.              Review that the control mechanisms implemented involve the adequate protection of the assets of Mexican Petroleum, its subsidiary production companies and subsidiary companies;

III.             Verify that computer systems, including accounting, operational and of any kind, have mechanisms to preserve the integrity, confidentiality and availability of information that prevent their alteration and meet the objectives for which they were implemented or designed. Also, monitor such systems to identify potential failures and verify that they generate sufficient and consistent information and ensure their availability appropriately;

IV.            Review that contingency plans and measures are necessary to prevent loss of information, as well as for recovery or rescue;

V.             Ensure the quality, sufficiency and timeliness of the information, as well as be reliable for the proper decision-making, and that such information is provided in a correct and timely manner to the competent authorities;

VI.            Review the effectiveness of internal control procedures to prevent and detect acts or operations that affect or may affect Mexican Petroleum, its subsidiary production companies and subsidiary companies, and communicate the results to the competent instances;

VII.           Provide the competent authorities, as well as the external auditors, with the necessary information at their disposal for their duties;

VIII.          Verify that the corporate structure of Mexican Petroleum, its subsidiary companies and subsidiary companies, complies with the principles of independence in the different functions that require it, as well as with the effective segregation of duties and exercise of powers attributed to each area, division or line of business, and may in any case make the Audit Committee the recommendations it deems necessary;

IX.            Provide the Audit Committee with the elements to enable it to carry out its duties, and inform it of the irregularities encountered in the performance of its tasks, as well as of the relevant deficiencies or deviations identified in the operation, in order for them to be remedied in a timely manner, with the corresponding follow-up;

X.             Report to the Audit Committee and the Director General of the deficiencies and irregularities detected in the performance of their duties and which may constitute liability in terms of the applicable legal provisions, that the corresponding procedures are started;

XI.            Turn to the Unit of Responsibilities the matters in which, as a result of the exercise of its functions, it detects possible administrative responsibilities;

XII.           Report at least six-monthly to the Audit Committee, or at the intervals it determines, on the results of its management;

XIII.          Submit for approval of the Audit Committee, after the Director General's opinion, its annual work programme, and

XIV.          The others provided for in this Law or determined by the Board of Directors.

Article 55.- The Internal Audit Office may designate, upon approval of the Board of Directors in each case, delegates in each of the production companies subsidiary of Mexican Petroleum, that they will have the functions set out in Article 54 of this Law with respect to the corresponding subsidiary production companies, and will act on the basis of the policies and guidelines established by the Internal Audit Office, prior to the approval of the Audit Committee.

Article 56.- The Director General will implement, on the basis of the guidelines approved by the Board of Directors, the internal control system in Petroleos Mexicanos, its productive companies. subsidiaries and, where applicable, subsidiary companies, which will have the following objectives:

I.               Establish mechanisms to provide for, identify, manage, monitor and assess the risks that may arise from the development of business activities;

II.              Prevent, detect and channel with the competent authorities and authorities the acts and omissions that may constitute corruption practices;

III.             Delimit functions and operations between areas, divisions or lines of business, in order to ensure efficiency and effectiveness in the performance of their activities and to avoid conflicts of interest;

IV.            To assist in the enforcement of applicable legal, accounting and financial provisions;

V.             Count on reliable and timely financial, economic, accounting, legal and administrative information per line of business, contributing to the proper decision-making;

VI.            Provide the correct operation of the information processing systems, and

VII.           Other as determined by the Board of Directors.

The internal control system and the guidelines that regulate it should be observed in the operation and financial and substantive activities.

The coordination functions of the internal control system under no circumstances may be performed by Internal Audit area personnel, or by persons or units that may have a conflict of interest to its proper performance.

Not later than 30 April of each year, the Director General shall submit to the Audit Committee, upon the opinion of the holder of the Internal Audit Office, a report on the status of the control system. internal to Mexican Petroleum, its subsidiary production companies and subsidiary companies, for the purpose of verifying compliance with it.

Article 57.- The external auditor of Petroleos Mexicanos will be appointed by the Board of Directors, on a proposal from the Audit Committee.

Article 58.- The Federation's Higher Audit Office will be competent to supervise Mexican Petroleum and its subsidiary production companies in terms of the constitutional and respective legal.

In the conduct of its audits and in the formulation of its observations and recommendations, the Higher Audit of the Federation shall take into account the provisions of the fourth paragraph of Article 25 of the Constitution, the transitional provisions of the Decree by which various provisions of the Political Constitution of the United Mexican States are reformed and added, in Matter of Energy, published in the Official Journal of the Federation on 20 September. December 2013, the principles and rules laid down in this Law and in the provisions that emanate from it, the legal framework of Mexican Petroleum and its subsidiary production companies, its legal nature and that of its acts and operations, as well as the results of the reviews that in the exercise of its functions carry out the audit and surveillance bodies in terms of this Law.

TITLE FOURTH

OF THE SPECIAL REGIME

CHAPTER I

SUBSIDIARY PRODUCTION COMPANIES AND SUBSIDIARY COMPANIES

Article 59.- Mexican Petroleum may have subsidiary production companies and subsidiary companies in terms of this Law.

Petroleos Mexicanos will act through subsidiary production companies to carry out the activities of exploration and extraction of hydrocarbons, without prejudice to the provisions of Article 63 of the Law.

Other activities of Petroleos Mexicanos may be carried out directly, through subsidiaries, companies in which it participates in a minority, directly or indirectly, or through any other association or alliance figure that is not contrary to the law.

Article 60.- The subsidiary production companies are productive enterprises of the State, with legal personality and own patrimony. They shall be organized and operated in accordance with the provisions of this Law and the provisions arising therefrom and shall be subject to the conduct, direction and coordination of Mexican Petroleum.

The subsidiary production companies will be subject to the provisions of Articles 3, 7, 8 and 9 of this Law, will have as their object the activities to be determined by the Board of Directors of Mexican Petroleum, in terms of Article 59, and shall operate under the special arrangements provided for in this Law for Mexican Petroleum in the field of budget; debt; acquisitions, leases, services and works; administrative responsibilities; remuneration; State dividend.

Article 61.- These are subsidiaries of Mexican Petroleum companies in which they participate, directly or indirectly, in more than fifty percent of their share capital, regardless of whether they are they are in accordance with Mexican or foreign law.

Subsidiary companies shall not be parastatal entities and shall have the legal status and shall be organised in accordance with the private law of the place of their establishment or creation.

Domestic subsidiaries that have as their object the purchase or sale of hydrocarbons shall be subject to the provisions of Article 34 of the Law of the Bank of Mexico.

Article 62.- The creation, merger or division of subsidiary production companies, as well as subsidiary companies in which Mexican Petroleum directly participates, will be authorized by the Council of Mexican Petroleum Administration, on a proposal from its Director General, which must be submitted in accordance with the rules dictated by the Council itself.

If the Board of Directors approves the proposal with any modifications it deems appropriate, the following shall be done:

I.               The Board of Directors shall issue the respective Agreement, which shall be its instrument of creation, which shall be published in the Official Journal of the Federation and which it shall establish, to the less, the following:

a) The object or activities that you can perform;

b) The integration of your heritage;

c) The provisions on the integration and designation of the administrative bodies, having regard to the provisions of Articles 64 and 65 of this Law;

d) The faculties of the administrative organs, and

e) The internal monitoring and control organs or mechanisms.

The instruments of creation of the subsidiary productive companies may be suitable by the Board of Directors of Mexican Petroleum.

II.              For direct participation subsidiaries, the corresponding corporate acts shall be held in accordance with the applicable legal provisions.

The Board of Directors may lay down the basis on which the corporate acts for the constitution, division or merger are to be carried out. of direct participation subsidiaries, without prejudice to the possibility of issuing specific rules when authorising each of those acts.

When approving the creation or participation in subsidiaries of direct participation of Mexican Petroleum, the Board of Directors shall determine whether, as part of the social object of such subsidiary undertakings, the possibility that they may, in turn, constitute or participate in other commercial companies shall be provided.

Article 63.- Subject to the provisions of the Law on Hydrocarbons, the Law of Revenue on Hydrocarbons, the provisions emanating from both orders, and other applicable, Mexican Petroleum may perform the hydrocarbon exploration and extraction activities, as follows:

I.               If the activities are carried out under an allocation, they must act through one or more subsidiary production companies, without prejudice to the service contracts that they may conclude for the best execution and operation in the areas subject to the allocation, in terms of this Law and the Hydrocarbons Act, and

II.              If the activities are carried out under a Contract for the Exploration and Extraction of Hydrocarbons:

a) In cases where Mexican Petroleum performs the activity exclusively, without for such effects to be a partnership or alliance with third parties, must do so through one or more subsidiary production companies, and

b) In cases that you intend to do in association or alliance with third parties, you may do so by creating or participating in companies subsidiaries, minority participation in other companies or other forms of association permitted under the Hydrocarbons Act, the Hydrocarbon Revenue Act and other applicable provisions.

In cases where Mexican Petroleum is part of a joint venture or consortium, it will be able to do so through subsidiary production companies or subsidiary companies.

The provisions of this fraction will be applicable when Mexican Petroleum is the winner in a tender process for the award of the Contract for the Exploration and Extraction of Hydrocarbons or when the Hydrocarbon Extraction is the result of a contract assignment migration process.

Article 64.- The management boards of the subsidiary production companies shall be integrated by no less than five or more than seven members, taking care that there are a majority of members who represent Mexican Petroleum appointed by its Board of Directors.

The members of the boards of the subsidiary production companies will be subject to the same regime of responsibilities as this Law provides for the members of the Board of Directors Mexican Petroleum.

Article 65.- The Energy and Finance and Public Credit secretariats will be able to count on directors appointed by them on the boards of the production companies subsidiary of Petroleos Mexicanos, after approval by the Board of Directors of the latter.

In direct participation subsidiaries, the Energy Secretariat may appoint one of the directors of the Board of Directors.

The application of the provisions of this Article shall consider the maximum number of members referred to in the previous article.

Article 66.- The liquidation of subsidiary production companies will be agreed upon by the Board of Directors of Mexican Petroleum, on the proposal of its Director General, and the respective process shall be developed in accordance with the guidelines to be determined by that person.

Article 67.- The subsidiary production companies will operate in a coordinated manner, consolidating operations in the use of financial resources, general accounting and information and surrender. accounts, as agreed by the Board of Directors of Mexican Petroleum.

Article 68.- The Board of Directors of Mexican Petroleum will be responsible for monitoring, monitoring and verifying that subsidiary production companies perform their activities and operate in accordance with the special arrangements applicable to them. For this purpose, it may establish the information and control mechanisms, disciplinary measures and other measures it deems appropriate.

Article 69.- The Board of Directors of Mexican Petroleum, on the proposal of its Director General, will approve the form and terms in which the rights that correspond to Mexican Petroleum will be exercised, to its subsidiary production companies or to its subsidiary undertakings, in respect of the formation, division, liquidation or merger of other companies or of the participation therein.

The provisions of the foregoing paragraph shall be subject to the provisions of the second paragraph of Articles 59 and 63 of this Law at all times.

In any event and without prejudice to the foregoing paragraphs, the Board of Directors shall authorize the participation of third parties in the capital of the subsidiary companies, as well as any other increased participation, by instructing the respective representatives and leaders to act accordingly in the bodies or in the appropriate bodies.

Article 70.- Subsidiary companies and subsidiary companies must align their activities with the Mexican Petroleum Business Plan, conduct their operations based on planning and strategic vision and best practices of corporate governance that will be approved by the Board of Directors of Mexican Petroleum, which will also issue the guidelines regarding its corporate alignment, evaluation and policies to Petroleos Mexicanos grants guarantees in your favor, or for those grants guarantees in favor of Mexican Petroleum or among themselves, as well as other aspects necessary for its proper functioning.

For the purposes of transparency and accountability of the investments of Mexican Petroleum in its subsidiary production companies, subsidiary companies and in companies in which it maintains some other shareholding, direct or indirect, the Board of Directors of Mexican Petroleum, on the proposal of its Director General, will issue guidelines governing the exercise of rights as owner or shareholder Mexican Petroleum, the performance of the employees or leaders that exercise the relevant rights, the information to be submitted to the Board of Directors and the other aspects to be determined by the Council itself.

Article 71.- The Board of Directors of Mexican Petroleum will issue the general policies according to which Mexican Petroleum or its subsidiary production companies, as well as their respective subsidiaries, may participate in a minority form in the share capital of other commercial, domestic or foreign companies, determining those relevant investments that must be previously approved by the Council itself.

CHAPTER II

REMUNERATION

Article 72.- In terms of the provisions of Articles 25, fourth paragraph, of the Constitution and Twentieth Transitory, fraction II, of the Decree for which various provisions are amended and added of the Political Constitution of the United Mexican States, in Matter of Energy, published in the Official Journal of the Federation on December 20, 2013, Mexican Petroleum and its subsidiary productive companies have a regime of special remuneration, other than that provided for in Article 127 of the Constitution.

Article 73.- When exercising its duties on the remuneration of the staff of Petroleos Mexicanos and its subsidiary production companies, the Board of Directors of Mexican Petroleum and its Committee on Human Resources and Remuneration, according to the approved personal services budget, will observe the following:

I.               Remuneration for staff shall be calculated in a manner equivalent to those in the industry or activity concerned, having as a guiding criterion that, given the conditions in the national labour market and international, companies have and retain the right workers to effectively meet their object, according to the approved tabs;

II.              The human resources policy may provide for the granting of incentives or extraordinary perceptions for the achievement of goals that are subject to the performance evaluation, taking into account the conditions of the labour market at the level of national and international;

III.             The remuneration policy will aim to recognise the work effort and the contribution of workers to the achievement of the company's objectives, in accordance with the approved tabulators, and

IV.            In the exercise of the personal service budget, Mexican Petroleum and its subsidiary production companies shall be subject to the provisions of Chapter VII of Title IV and other applicable provisions of this Law.

Article 74.- The policy of hiring non-unionized personnel shall require the publication and receipt of requests, on the Mexican Petroleum Internet page, of any vacancy that that company or its subsidiary production companies intend to contract.

The creation of posts, modifications to the organizational structure and staff templates, transfer of places and hiring or appointment of the staff of Mexican Petroleum and its companies Subsidiary production will only serve the best operational efficiency of the companies.

CHAPTER III

ACQUISITIONS, LEASES, SERVICES, AND WORKS

First Section

General Provisions

Article 75.- Petroleos Mexicanos and its subsidiary production companies will carry out the acquisitions, leases, hiring of services and works that they require in terms of the Article 134 of the Political Constitution of the United Mexican States, subject to the principles of economy, efficiency, efficiency, impartiality and honesty, in order to assure the State of the best conditions available in terms of price, quality, financing, opportunity and other relevant circumstances of agreement with the nature of the procurement.

To the acquisitions, leases, contracting of services and works of any nature that are carried out by Petroleos Mexicanos and its subsidiary productive companies will be applicable to the provisions that to the This Law establishes this Law and the others that derive from it. They will not be applicable to the Public Sector Procurement, Leases and Services Act or the Public Works and Services Act Related to the Mismas.

Article 76.- The Board of Directors of Mexican Petroleum will issue the provisions to which Mexican Petroleum and its subsidiary production companies will be subject to the acquisitions, leases, hiring of services and execution of works, observing at all times the principles set out in this Law, according to the following bases:

I.               General provisions may be laid down to allow for the development of procurement procedures according to the nature of the procurement;

II.              They shall be considered, inter alia:

a) The application of conditions of equality and transparency among all participants;

b) The establishment of the general requirements of the open contest bases;

c) The terms and conditions under which procedures other than open competition will be performed, and

d) The objective and measurable evaluation criteria;

III.             Consider provisions to ensure that procurement procedures are carried out under the principles of honesty, transparency, maximum publicity, equality, competitiveness, simplicity and that they are expeditious, and may consider, other schemes, pre-qualification stages, subsequent offers of discount and price negotiation.

The Board of Directors of Mexican Petroleum will establish the cases in which, taking into account the impact or relevance of the hiring, social witnesses may participate during the respective procedures carried out by Mexican Petroleum and its subsidiary production companies, as well as the mechanisms and requirements for its designation. It will be up to social witnesses:

a) Participate as an observer in the various stages of procurement procedures;

b) Issue a final statement including your comments and, if applicable, recommendations regarding the hiring of treat, and

c) Where appropriate, give notice of irregularities to be detected by the Internal Audit Office and the Responsibilities Unit;

IV.            Publish information about the hiring of companies on their website, as provided for in the Federal Law on Transparency and Access to Government Public Information;

V.             Define the instance responsible for ruling the provenance of carrying out procedures other than the open competition, as well as the minimum justification to be included in the decision;

VI.            Establish policies that regulate cases where the company will refrain from considering proposals or conclude contracts, among others, with people who:

a) Tengan conflict of interest with Mexican Petroleum, its subsidiary production companies or its subsidiary companies;

b) Be disabled to exercise commerce or your profession;

c) Are disabled to perform a job, job or commission in the public service;

d) Are disabled by the competent authority, under the laws of Procurement, Leases and Services the Public Sector and Public Works and Services Related to the Mismas;

e) Have non-compliances to be resolved with the company or have terminated a contract;

f) Hayan obtained, improperly, inside information, and

g) Use third parties to evade the provisions of this fraction;

VII.           Establish the way in which the planning, programming and budgeting of the hires will be carried out, as well as the evaluation of their results based on objective indicators;

VIII.          Set the minimum content of the contracts, as well as the general rules that seek their best and timely execution;

IX.            Require minimum percentages of national content, in accordance with the nature of the procurement, and in accordance with international treaties to which Mexico is a party;

X.             For the case of contracts for integral services for the exploration and extraction of hydrocarbons, it should be provided that the revenue from these contracts must be used, first, to cover the costs arising from the independently of the other income obtained, as well as to determine the form and terms in which the accounts must be kept separately from each of these contracts, and

XI.            Provide the necessary facilities for the procedures to be performed preferably by electronic means.

Article 77.- The acquisitions, leases and hiring of services and works shall be carried out, as a general rule, by open competition, upon public notice. The proposals may be submitted and analyzed through electronic means, in the terms established by the Board of Directors of Mexican Petroleum.

The Board of Directors may provide for different award mechanisms, such as upstream auctions, downstream auctions, or auctions at the first closed price in which case the envelopes must be presented and opened in the same public session, among others. In the tender processes, the criteria for the tiebreakers shall be provided, which shall be included in the relevant tendering bases.

In any case, the bidding processes must be carried out under the principles of transparency, maximum advertising, equality, competitiveness and simplicity.

Where, by exception, the open competition is not suitable to ensure the best conditions, the other procedures to be determined by the Board of Directors may be used.

Article 78.- In cases where the open competition procedure is not ideal to ensure the best conditions available in terms of price, quality, financing, opportunity and other circumstances relevant to the nature of the procurement, subject to the determination of the body responsible for ruling the derogation from the open competition, the undertaking may choose to use other procedures which may be other, of restricted invitation or of direct award, provided that any of the following assumptions are updated:

I.               There are no technically reasonable alternative or alternative goods or services, or that there is only one possible bidder on the market. Likewise, in the case of a person who holds the exclusive ownership or licensing of patents, copyrights, or other exclusive rights, or as works of art;

II.              When national security, public safety, or the security of the company, its industrial facilities and pipelines, are put at risk in the terms of the laws of the matter;

III.             A fortuitous case or force majeure, it is not possible to obtain goods or services through the open competition procedure in the time required to attend to the eventuality in question. In this case the quantities or concepts should be limited to what is strictly necessary to deal with it;

IV.            A contract concluded through open competition has been terminated, in accordance with the provisions of the Board of Directors;

V.             An open competition has been declared to be deserted, provided that the requirements laid down in the call for competition or in the invitation are maintained, the non-compliance of which has been considered as a cause of disposal because it affects directly the solvency of the propositions;

VI.            There are justified reasons for the acquisition or lease of any particular brand goods, or circumstances that may lead to additional and justified losses or costs;

VII.           It is a matter of used or reconstructed goods in which the price may not be greater than that determined by means of the credit institutions or third parties authorised to do so in accordance with the applicable provisions, issued within the previous six months and in force at the time of the award of the respective contract;

VIII.          It is a question of consultancy services, consultancy services, engineering or other studies, research or training;

IX.            It is the acquisition of goods for direct marketing or for submission to production processes which it carries out in compliance with its own object or purposes expressly laid down in the applicable provisions;

X.             It is a matter of purchases of goods from persons who, without being a regular supplier, offer goods on favourable terms, because they are in a state of liquidation or dissolution, or, under intervention judicial;

XI.            It is the services provided by a natural person, provided that they are carried out by themselves without requiring the use of more than one specialist or technician;

XII.           It is a matter of maintenance services for goods where it is not possible to specify their scope, to establish the quantities of work or to determine the corresponding specifications;

XIII.          The object of the contract is the design and manufacture of a good that is used as a prototype to carry out the tests that demonstrate its operation. In such cases it shall be agreed that the rights to the design, use or any other exclusive right are in favour of the contractor;

XIV.          It is a matter of specialized equipment, substances and materials of chemical, chemical or biochemical origin to be used in experimental activities required in scientific research and technological development projects, always such projects are authorised by the decision of the Board of Directors;

XV.           The acquisition of goods, the execution of works or the provision of services for payment purposes is accepted;

XVI.          Those directly linked to the remediation of spills, the emission of toxic or dangerous gases, irregular dumping of hydrocarbons or any other incident that puts workers, the population, the environment or the facilities used by the undertaking, which are the result of accidents, sabotage, theft, other intentional acts or other events requiring immediate attention;

XVII.         It is a question of work which requires, in particular, the use of marginalized peasant or urban labour, and that they are directly engaged with the inhabitants of the town or the place where the work is to be carried out, either as physical or moral persons;

XVIII.        The services of public servants, experts, legal services and representation in judicial, arbitral or administrative processes;

XIX.          In the case of refs or services related to the installation, maintenance or preservation of industrial equipment of the original equipment manufacturer or machinery, in order to maintain the technical guarantee of the equipment or machinery;

XX.           In the case of the conclusion of a strategic partnership or alliance, or to be carried out with natural or moral persons engaged in engineering, research and technology transfer and development, in order to implement the technological innovations in the national infrastructure.

The provisions of this fraction shall not be applicable in the case of oil exploration and extraction activities that Mexican Petroleum or its subsidiary production companies perform under a contract that has been awarded to it as a result of the migration of an allocation, in which case the provisions of the Hydrocarbons Act will be available;

XXI.          It is a matter of hiring banking, securities trading, securities custody, or the establishment of trusts;

XXII.         The hires for the purpose of developing technological innovations related to the object of Mexican Petroleum, and

XXIII.        The hiring that it carries out with dependencies and entities of the public, federal, or state administration, as well as its subsidiary companies.

Article 79.- In procedures other than open competition people will be invited with the possibility of adequate response; that they have the financial, technical, operational and other capacity necessary to comply with the contracts, and have experience in the activities or works to be performed.

When hiring is done by restricted invitation, it will be spread on the web page of the contracting company, so that anyone can send information about the people. considered in the invitation.

Article 80.- All acts that are developed within the procurement procedure that is regulated in this Chapter, up to and including the time of the failure, shall be of an administrative nature.

Once the contract is signed, it and all acts or aspects resulting from it shall be of a private nature and shall be governed by the applicable commercial or common law.

Article 81.- Against the failure that awards the contract, proceed:

I.               The review appeal to the collegiate body determined in the Organic Statute, and in accordance with the procedure laid down in the Regulation of this Law, or

II.              The court action that corresponds to the Federal Court of Justice and Administrative Justice.

Against other resolutions issued during the contest shall not proceed with any ordinary means of defence and, in the event of any irregularity in such decisions, they may be fought with reason for failure.

Once a contract has been awarded and signed, all disputes arising out of its interpretation or compliance shall be the jurisdiction of the competent courts of the Judicial Branch of the Federation, except an alternative means of dispute settlement has been agreed.

Section Second

Of Measures to Ensure Integrity in Contracts

Article 82.- For the conclusion and execution of procurement contracts, leases, services and works, the Board of Directors of Mexican Petroleum, on the proposal of its Director General, will issue the necessary provisions and policies for Mexican Petroleum and its subsidiary production companies to have mechanisms that allow them to prevent, identify, remedy and punish illegal, illegal, negligent acts or omissions or any other than in the framework of the procedures of procurement and the implementation and implementation of the contracts may affect or have an impact on the operation of the undertakings.

Article 83.- The provisions and policies referred to in the preceding article shall provide for, at least:

I.               The mechanisms and procedures for identifying, systematising and managing risk factors or points that may be presented or updated during procurement processes or in the execution of contracts, as well as procedures and actions to be followed in the event of irregularities in both cases, including their suspension;

II.              The general bases for determining the minimum requirements to be met by those interested in contracting with Mexican Petroleum and its subsidiary production companies, as well as the mechanisms for their evaluation, which they will have to consider, among others:

a) Technical and financial capacity for project execution;

b) Previous experience that accredits the ability to execute contractual obligations, and

c) The status of your tax and labor obligations, and

III.             The mechanisms for implementing a system for the receipt of anonymous complaints and complaints, by which any interested party may report acts or omissions during the various stages of the procurement procedure or during the performance of the contract.

The aspects referred to in this article should be regulated, inter alia, in the light of the importance or amount of the different hires that the companies carry out, as well as the relevance of contractors for their operations.

Article 84.- The Board of Directors of Mexican Petroleum will provide what is necessary for the regulations and provisions of this company and its subsidiary production companies to determine (a) the level of decision-making and responsibility of the officials of the undertakings in the decision-making during the procurement procedures and in the performance of the contracts.

Article 85.- Petroleos Mexicanos and its subsidiary production companies will have a public information system on their suppliers and contractors to be updated periodically and contain the information of the last five years of the contracts concluded, as well as the history of compliance with them, including, where appropriate, the extension, increase or adjustment in such contracts.

The reporting system should at least count on the following:

I.               Data from suppliers and contractors, including nationality, location, spin, legal constitution and economic activity, who will be required to report any modification in terms of applicable provisions;

II.              Information on contracts concluded with companies and their performance, including among other aspects, compliance in time, application of penalties, quality of goods or works;

III.             Compliance with environmental standards, industrial and operational security and labor responsibility;

IV.            Certifications of compliance with technical standards as well as quality assurance, and

V.             Results of the assessments that are made available to suppliers and contractors by specialized companies.

The Board of Directors of Mexican Petroleum, on the proposal of its Director General, will determine the rules for the operation of the system and the information it will have to include, considering the size of the suppliers and contractors and their relevance to the operations of the contracting companies.

The information contained in the system may be used to determine the participation and prequalification in the procurement procedures, but registration in the system may not be required as a requirement of participation.

Article 86.- The hiring of Mexican Petroleum and its subsidiary production companies will be subject to the provisions of the Federal Anti-Corruption Law in Public Contracts, between other orders. For this purpose, the Secretariat of the Civil Service shall be competent authority.

CHAPTER IV

BIENTS

Article 87.- All acts relating to the provision, use and enjoyment of the goods of Mexican Petroleum and its subsidiary production companies shall be governed by the applicable common law, by observing the provisions of this Chapter.

Article 88.- The real estate of Petroleos Mexicanos and its subsidiary production companies shall be subject to the regime of public domain of the Federation in accordance with the provisions that for such legal figure establishes the General Law of National Goods and this Law.

The Board of Directors of Mexican Petroleum may, on the proposal of its Director General, disintegrate from the regime of public domain and authorize the disposal, under any title, of the goods Mexican Petroleum and its subsidiary production companies, as well as their affectation in warranty, mortgage or any other charge.

In all cases, Petroleos Mexicanos and its subsidiary production companies must process the registration of the securities referred to in Article 42 of the General Law of National Goods, in the Public Registry of Federal Property.

Article 89.- The Board of Directors shall issue the policies governing the acts of disposition and taxation referred to in the previous article, as well as those relating to the acquisition, leasing, disposal and administration of the goods of Mexican Petroleum, its subsidiary production companies and, where appropriate, subsidiary companies, having regard to the provisions of Article 134 of the Constitution and without applying to the the provisions of the General Law on National Goods.

The Board of Directors of Mexican Petroleum will be able to determine that the administration, control and disposal of the goods of the subsidiary productive companies will be for Mexican Petroleum.

CHAPTER V

RESPONSIBILITIES

Article 90.- The application of the Federal Law on Administrative Responsibilities of Public Servants to the personnel of Mexican Petroleum and its subsidiary production companies will be the responsibility of the Responsibilities Unit, which will be competent exclusively for:

I.               Receive and pay attention to complaints and complaints and conduct investigations on the basis of complaints, and

II.              To process the administrative responsibility procedures and to impose the respective penalties, in terms of applicable laws.

The Responsibilities Unit will have no competence in internal control and audit and will guarantee its organic independence from the Internal Audit and the areas that will be established to coordinate the internal control system.

Article 91.- Without prejudice to the provisions of the previous article, the staff of Mexican Petroleum and its subsidiary production companies will be liable for the damages that I will bring to to cause them or companies in which they have any participation, arising from acts, acts or omissions contrary to the provisions of this Law. Such liability shall be based on solidarity between the persons who have taken the decision, as well as those who have participated in the act, act or omission in question.

The corresponding compensation shall cover the damages caused to Petroleos Mexicanos, its subsidiary production companies and subsidiary companies, without prejudice to the removal of any damages of the people involved.

The action to require the liability referred to in this Article shall be prescribed in five years from the day on which the act, act or omission which caused the damage has taken place. injury, except in the case of acts, acts or omissions with continuous effects, in which case the limitation period shall begin to be counted when the effects of such act, act or omission are completed.

Regardless of the criminal or administrative responsibilities to which there may be, the damages caused to Petroleos Mexicanos, its subsidiary production companies and subsidiary companies, may to be reclaimed through the civil road.

Article 92.- The staff of Petroleos Mexicanos and its subsidiary production companies shall not incur, individually or jointly, liability for the damages that I will cause to the same, as a result of acts or omissions, as well as decisions taken, when acting in good faith, any of the following cases are updated:

I.               Meet the requirements for the approval of the respective issues;

II.              Make decisions or vote based on information provided by the areas responsible for the matter, or

III.             You have selected the most appropriate alternative, to your best knowledge and understanding, or the negative heritage effects have not been foreseeable; in both cases, based on the information available at the time of the decision.

Article 93.- The Responsibilities Unit may refrain from initiating a procedure or from imposing administrative penalties on personnel, when investigations or reviews are conducted that any of the following assumptions are updated:

I.               That for the same time, for the same fact and in a period of one year, the performance of the employee, in the attention, processing or resolution of matters to his office, is referred to a question of criterion or opinable or debatable, in the that various solutions can be supported validly, and that the elements taken into account by the employee in the decision he or she has taken into account; or

II.              That the act or omission was either corrected or subsated spontaneously by the public server or implied manifest error.

In any of these assumptions, the effects that, if any, would have occurred, must have disappeared or have been resented.

Article 94.- The staff of Mexican Petroleum, its subsidiary production companies and subsidiary companies, which no longer perform their employment, position or commission in the same, shall observe, up to two years years after the completion of their duties, the following:

I.               In no case shall he take advantage of his or her influence or gain any advantage arising from the function he performed, whether for himself or for his spouse, consanguine relatives or for affinity to the fourth grade, or civil relatives, or for third parties with whom they have professional, employment or business relations, or for partners or companies of which he or the persons referred to above form or have been a party, and

II.              Do not use, for your own benefit or third parties, the information or documentation that you have had access to in your employment, office or commission and that are not in the public domain.

The staff of Petroleos Mexicanos, its subsidiary production companies and subsidiary companies, must observe the obligation of confidentiality with respect to the information and documentation to which it has access on the occasion of their duties, on the same terms as the second paragraph of Article 28 of this Law.

Article 95.- The Board of Directors of Mexican Petroleum will issue an Ethics Code applicable to the personnel of Mexican Petroleum, its subsidiary production companies and subsidiary companies, in the the principles and guidelines of corporate ethics applicable to them shall be established. The Council itself shall determine the bodies responsible for monitoring its compliance and for imposing disciplinary measures which it determines.

Article 96.- The Board of Directors of Mexican Petroleum will approve the policies for hiring in favor of the members of the Board of Directors, Director General, directors and those employees to be determined by the Council itself, by both Mexican Petroleum and its subsidiary production companies, insurance, bonds or rubes that cover the amount of the compensation for damages caused by its performance, or, insurance to assume the defence and legal assistance services of such employees.

CHAPTER VI

STATE DIVIDEND

Article 97.- Mexican Petroleum and its subsidiary production companies will annually deliver to the Federal Government a state dividend, as follows:

I.               In the month of July each year, the Board of Directors of Mexican Petroleum will send to the Secretariat of Finance and Public Credit a report on:

a) The financial situation of the company and its subsidiary production companies, and

b) The plans, options and prospects for investment and financing in the following year and the five years after, accompanied by an analysis on the profitability of these investments and the projection of the relevant financial statements;

II.              The Secretariat of Finance and Public Credit, considering the information referred to in the previous fraction and after favorable opinion of the Technical Committee of the Mexican Petroleum Fund for Stabilization and Development, will determine the amount of the amount that Mexican Petroleum, as well as each of its subsidiary production companies, will have to hand over to the Federal Government as a state dividend;

III.             The amounts indicated in the previous fraction will be included in the Revenue Law Initiative of the Federation of the fiscal year that corresponds, for approval by the Congress of the Union, which will only be reviewed the low, and

IV.            Petroleos Mexicanos and its subsidiary production companies will find out the state dividend approved in the Federation's Revenue Law to the Federation's Treasury, in the form and terms indicated by the Secretariat of Finance and Public Credit.

Article 98.- The remainder of the amount that is not delivered as a state dividend in terms of the previous article, shall be reinvested in accordance with the decisions taken by the Board of Directors of Mexican Oil.

Article 99.- Mexican Petroleum, must make public through electronic means, in terms of the applicable provisions in the matter:

I.               The report referred to in Article 97, fraction I of this Law, and

II.              The agreements of its Board of Directors in which the destination of the resources held in accordance with Article 98 of this Law is determined.

CHAPTER VII

BUDGET

Article 100.- Petroleos Mexicanos and its subsidiary production companies have budgetary autonomy, and will be subject only to the financial balance sheet and the personal service expenditure ceiling that, to Proposal of the Secretariat of Finance and Public Credit to approve the Congress of the Union, as well as to the special regime in budgetary matters provided for in this Chapter.

In any case not provided for in this Chapter, the regulation shall be applicable in accordance with this Law to the Board of Directors, observing the principles of legality, honesty, efficiency, efficiency, economy, rationality, austerity, transparency, control and accountability in the administration of its assets and resources.

Article 101.- In drawing up its annual budget, Mexican Petroleum and its subsidiary production companies will observe the following:

I.               The Secretariat of Finance and Public Credit will communicate to Petroleos Mexicanos, by June 15 at the latest, the preliminary estimate of the macroeconomic variables for the next fiscal year, which will be taken into consideration. by the Director General of Mexican Petroleum to develop, with the participation of its subsidiary production companies, the consolidated draft budget for the year to be presumed;

II.              The Director General of Mexican Petroleum will send to the Secretariat of Finance and Public Credit, no later than July 15, the consolidated draft budget approved by the Board of Directors, including a Consolidated indicative of the financial balance goal of the company itself and its subsidiary production companies for the following five years and for the year to be presumed, as well as the global ceiling for services for personal services;

III.             In case the Secretariat of Finance and Public Credit considers that the goal of financial balance with and without physical investment or the global ceiling for services for personal services should be adjusted, it will integrate its proposal and the corresponding adjustments in the Federation's Draft Budget, communicating it to Mexican Petroleum. The proposal and the adjustments and accompanying the original proposal of Mexican Petroleum should be motivated in the explanatory statement of the aforementioned Project, and

IV.            The Chamber of Deputies, when approving the Federation's Government Budget, will authorize the goal of financial balance and the ceiling of personal services of Mexican Petroleum and its subsidiary productive companies.

Article 102.- Petroleos Mexicanos and its subsidiary production companies will exercise their respective budgets according to the following, without requiring authorization from the Secretariat of Finance and Credit Public:

I.               The Board of Directors of Mexican Petroleum will authorize the budget calendars and modifications thereto;

II.              The Board of Directors of Mexican Petroleum will authorize the budget corresponding to the programs and investment projects of the company and its subsidiary production companies, observing the following:

a) Mexican oil companies will count, according to the guidelines approved by its Board of Directors, with a mechanism of planning of investment programmes and projects in which at least the short-, medium-and long-term investment needs are established, by means of assessment criteria that enable the priorities to be established between the projects;

b) Projects in which investment expenditure is exercised must increase the company's wealth value;

c) Projects whose execution comprises more than one fiscal year shall be included, as appropriate, in the chapters (a) specific to the draft budget of the Federation of the European Union for the purposes of the draft budget of the Federation concerning commitments and multiannual expenditure for investment projects, as referred to in Article 41 (2) (g) and (2) respectively; Federal Law of Budget and Accountability, and its evolution shall be included in the quarterly reports identified in section VI of this Article, and

d) Mexican oil companies will have to count, according to the guidelines approved by its Board of Directors, with a mechanism evaluation of its investment programmes and projects, in the course of its implementation and once it is completed. This mechanism shall be independent of the mechanism referred to in point (a) above;

III.             They will not be applicable to the austerity measures contained in the Federation's Government Budget or those that, if necessary, are issued for the Federal Public Administration. However, they will have to implement own austerity programs in the spending and use of resources, without undermining the efficiency of their operation, in accordance with the provisions approved by the Board of Directors of Mexican Petroleum, which will allow them to generating economies and improving their financial balance;

IV.            The Director-General of Mexican Petroleum or the Director General of the subsidiary productive company that corresponds to it shall authorize, in the terms established by the Board of Directors of the first:

a) Regarding the hiring referred to in Chapter III of Title IV of this Law:

1.       The celebration of multi-annual contracts, and

2.       The call, award and, where appropriate, formalisation of contracts whose validity starts in the following fiscal year, based on the preliminary draft budget, and

b) The establishment of trusts and the holding of similar mandates or contracts in which public resources are provided. It shall be the responsibility of the Director General of Mexican Petroleum or the Director-General of the corresponding subsidiary production company, which in the quarterly reports referred to in the following fraction VI and in the Public Account is included a report on the performance of the mission and purpose of these instruments, as well as the resources exercised for this purpose. This report should be made available to the general public on its website.

The Director General of Mexican Petroleum or the corresponding subsidiary production company may delegate the powers identified in this fraction, in an official of the lower immediate hierarchical level;

V.             Determine the adjustments that correspond to your budgets in case of revenue declines, to meet the approved financial balance goal;

VI.            They must send to the Secretariat of Finance and Public Credit, for the integration of the monthly and quarterly reports referred to in Article 107 of the Federal Law of Budget and Accountability, as well as for the integration of the Public Account and other reports of accountability, budgetary, borrowing and financial information, in the formats and terms that the Secretariat establishes, exclusively for the purposes of the homogeneous presentation of that information, and

VII.           With the approval of the Board of Directors, Mexican Petroleum will use its own surplus income to increase its physical investment expenditure or to cover its short-term and long-term pension and pension liabilities. health.

Article 103.- The Board of Directors of Mexican Petroleum will authorize the adjustments to its budget and to its subsidiary production companies that determines in the guidelines that issue. The other adjustments shall be authorized by the Director General of Mexican Petroleum or by the appropriate officials, in terms of these guidelines and the provisions of the Organic Statute.

Only with the authorization of the Secretariat of Finance and Public Credit can adjustments be made that imply deterioration of the annual financial balance goal or increases in the regularizable budget of the personal services of Petroleos Mexicanos. The Secretariat shall report to the Congress of the Union on the adjustments made in terms of this paragraph, in the quarterly reports referred to in Article 107 of the Federal Budget and Liability Act.

Article 104.- Mexican Petroleum and its subsidiary production companies shall be subject to the following provisions regarding personal services:

I.               Their respective budgets must include in a specific section, the whole of the expenditures corresponding to the expenditure on personal services, which includes:

a) The remunerations that correspond to your workers by way of ordinary and extraordinary perceptions;

b) Social security contributions;

c) The tax obligations inherent in such remuneration, and

d) Wage and economic forecasts to cover, if approved, wage increases, job creation and other measures of a kind work;

II.              The Board of Directors of Mexican Petroleum will authorize, on the basis of the proposal made by its Committee on Human Resources and Remuneration, the salary tabulators and the company's human resources policies and its subsidiary production companies;

III.             The contributions that are caused by the remuneration of the workers of the Mexican Petroleum and its subsidiary production companies shall be retained and informed to the respective tax authorities of conformity with the applicable legislation and may not be paid by undertakings in the form of supply, extraordinary perception or any other concept;

IV.            The Board of Directors of Mexican Petroleum will authorize, subject to the approved personal services budget, its organic structure and that of its subsidiary productive companies.

The movements to their organic, occupational and wage structures must be carried out by means of compensated budgetary adjustments, those which shall in no case increase the regularizable budget for personal services of the current fiscal year or subsequent fiscal year;

V.             The creation, replacement of places and new hires will only proceed when the approved resources are available to cover all the inherent expenses, including the obligations by way of taxes, contributions of social security and other payments and benefits which are to be covered by law. The resources to cover obligations inherent in hiring that have a future impact on expenditure shall be set up in reserves that ensure that those obligations are at all times fully funded;

VI.            The extraordinary perceptions that, if any, are covered by incentives, acknowledgements, rewards, incentives and any payment equivalent to them, may be granted exceptionally to workers of Mexican Petroleum, as long as they have resources specifically approved for that purpose and conditioned to the fulfillment of commitments of results subject to evaluation.

Extraordinary perceptions do not constitute a fixed, regular or permanent income, since their granting is subject to requirements and conditions variables. Such payment concepts may in no case form an integral part of the calculation basis for the purposes of compensation or settlement or social security benefits;

VII.           The persons hired under the professional services provision for fees, in no case will receive the remuneration that corresponds to the workers of Mexican Petroleum or its subsidiary productive companies. Such contracts shall be made in terms of the civil legislation and the total amounts that are eroded by the contracted services, shall be reported in the quarterly reports referred to in Article 107 of the Federal Budget Law and Tax liability;

VIII.          They will permanently broadcast on their website and update the following information quarterly:

a) The collective contract of work and the trust staff regulations;

b) Approved tabs, breaking down all concepts and amounts of ordinary and extraordinary perceptions;

c) Expenditures for retirement and pension purposes; as well as actuarial cost updates of your employment liability;

d) Loans or loans, as well as applicable fees, that you grant to your workers, retirees and pensioners;

e) Support for the performance of the function and other services that, if any, are granted to workers, who are not part of their remuneration;

f) Monthly amounts held by temporary or temporary hires;

g) The guidelines approved by the Board of Directors of Mexican Petroleum, based on which are awarded and cover the concepts described in the previous, and

h) The amounts of the amounts in the quarter corresponding to each of the concepts described in points (b) to (f) above.

The above, without prejudice to the information which, in terms of the applicable legal provisions in the matter, are required to publish in that Internet page.

Likewise, Petroleos Mexicanos and its subsidiary production companies will report on donations or any contributions made to individuals or moral, whatever its legal nature or object, and

IX.            Remit exclusively for knowledge to the Secretariat of Finance and Public Credit, quarterly, the information regarding the organic structure and the workforce.

Article 105.- Mexican Petroleum shall submit to the Congress of the Union the information it requests in connection with its budget. Such a request shall be made by the governing bodies of the Chambers or by the competent committees, as well as the Centre for Public Finance Studies of the Chamber of Deputies.

CHAPTER VIII

DEUDA

Article 106.- In the management of its constituent obligations of public debt, Mexican Petroleum and its subsidiary production companies will be subject to the following:

I.               Petroleos Mexicanos will send annually, after approval of its Board of Directors, its global financing proposal, including the one that corresponds to its subsidiary production companies, to the Secretariat of Finance and Public Credit to be incorporated into a specific section of the Federation Revenue Act initiative that the Federal Executive submits to the Congress of the Union, in accordance with Article 10 of the General Law on Public Debt;

II.              Petroleos Mexicanos will be able to carry out, without requiring authorization from the Secretariat of Finance and Public Credit, official negotiations, informal or exploratory negotiations on the possibility of going to the internal and external market of money and capital and to contract the internal and external financing that it requires for itself and its subsidiary production companies;

III.             Petroleos Mexicanos will be responsible for what:

a) The obligations you hire do not exceed your ability to pay;

(b) The resources that you obtain are intended correctly in accordance with the legal provisions applicable;

c) Payments are made timely, and

d) Monitor the development of your particular financial program;

IV.            The obligations constituting public debt for no reason and shall in no case grant or grant to its holders rights to the ownership, control or patrimony of Mexican Petroleum or its subsidiary production companies or on the domain of hydrocarbons in the subsoil;

V.             The constitutional obligations of public debt of Mexican Petroleum and its subsidiary companies do not constitute obligations guaranteed by the Mexican State, and

VI.            Petroleos Mexicanos will coordinate with the Secretariat of Finance and Public Credit in its financing operations, as follows:

a) Once approved the amounts referred to in the previous fraction I, the Secretariat of Finance and Credit The public and petroleum companies will agree to the calendarization of the financing operations of this company and its subsidiary production companies, taking care not to increase the cost of financing the rest of the public sector, or to reduce sources of financing for the same, and

b) To perform additional financing operations or to modify those agreed upon in accordance with the The Mexican Petroleum Company will give notice to the Secretariat of Finance and Public Credit, with at least fifteen working days in advance, regarding each operation that the company or its subsidiary companies intends to carry out.

The Secretariat of Finance and Public Credit may order the operation in question to be postponed, when any of the cases referred to in subparagraph (a) above are verified until all the conditions that prompted the decision to postpone are exceeded.

In case the Secretariat of Finance and Public Credit does not express its decision within ten days " (s) counted from the notice referred to in the first paragraph of this paragraph, it shall be understood that the respective operation may be carried out.

Article 107.- It is up to the Board of Directors of Mexican Petroleum to approve, on the proposal of its Director General, the general and political characteristics for the procurement of public debt, direct and contingent liabilities, in charge of the company and its subsidiary production companies.

Article 108.- The Director General of Mexican Petroleum will submit a half-yearly report, approved by the Board of Directors, to the Congress of the Union and to the Federal Executive on the use of the indebtedness of the company and its subsidiary production companies, in particular with respect to the profitability of the projects; their financial conditions; the management of the availability of debt associated with the debt; and disbursements and risk profile.

TITLE FIFTH

TRANSPARENCY AND ACCOUNTABILITY

Article 109.- Petroleos Mexicanos and its subsidiary production companies shall be subject to applicable laws on transparency and access to information, oversight and accountability and combating corruption, to prevent, identify, investigate and punish acts or omissions that contravene them.

Article 110.- Without prejudice to the obligations regarding transparency and access to information provided for in the law of the matter, the Board of Directors of Petroleum Mexicans, on a proposal from their Audit Committee and after the opinion of the Director General, will provide what is necessary to make available to the general public, on a regular basis and through their website, updated information that make it possible to know the situation of the company, its subsidiary production companies and subsidiaries, in financial, administrative, operational, economic and legal matters, as well as their risks, in accordance with the provisions of Article 104 of the Securities Market Act, and with the content, periodicity and scope of determine the administrative provisions applicable to the issuing of securities referred to in the prescribed precept.

The relevant events referred to in Article 104, fraction V of the Securities Market Act, shall be communicated immediately to the Board of Directors of Mexican Petroleum.

Article 111.- In compliance with the provisions of the Federal Law on Transparency and Access to Government Public Information and other applicable provisions, the Board of Directors of Mexican Petroleum will adopt the necessary measures for the protection and protection of the information related to the business, economic and industrial activities developed by Petroleos Mexicanos and its companies productive subsidiaries for the achievement of their objects, and which It means being able to obtain or maintain a competitive or economic advantage vis-à-vis third parties in carrying out such activities. Such information shall be deemed to be commercial reserved in terms of that law.

Article 112.- In compliance with the disclosure obligations provided for in this Law, the Federal Law on Transparency and Access to Public Information Government and other applicable provisions, Mexican Petroleum and its subsidiary production companies will ensure that reports or reports are presented in a clear, simple, accurate, reliable and up to date.

Article 113.- The Director General of Mexican Petroleum must submit, by April of each year, for approval by the Board of Directors and, through the President of the latter, the Federal Executive and the Congress of the Union, a report containing at least the following:

I.               A report by the Director General on the march of Mexican Petroleum, its subsidiary production companies and subsidiary companies and, where appropriate, on the main existing projects. This report should be carried out by line or branch of business, in addition to using indicators or parameters commonly used at international level for the correct and timely measurement of the results and to be linked to the objectives and goals that have been set in the Business Plan;

II.              The explanation and statement of the main accounting policies and criteria and of information followed in the preparation of financial information;

III.             The states that show the financial situation of Mexican Petroleum during and to the date of the close of the financial year, its changes and results, as well as other information that is necessary to complete or clarify the data supplied with those states;

IV.            A report on the exercise of your budget, including deviations in amounts, time and scope of execution of the contracts to be carried out, and

V.             The evaluation of the Board of Directors on the implementation of the annual programs of Mexican Petroleum.

The report must be subscribed by the Director General and the Chairman of the Board of Directors and should be disseminated on the Mexican Petroleum website.

Article 114.- The members of the Board of Directors, the Director General and all staff of Mexican Petroleum and its subsidiary production companies shall, in terms of the applicable provisions, to report to the competent authorities and authorities, to natural or moral persons who carry out acts or omissions contrary to the law, inter alia, those who have the object or direct or indirect consequence of influencing the decision of any official of the companies or of the members of the Board of Directors, to obtain a personal, direct or indirect economic benefit.

TITLE SIXTH

OTHER PROVISIONS

Article 115.- The national controversies in which Mexican Petroleum and its subsidiary production companies, whatever their nature, will be part of the competition the courts of the Federation, except to grant the guarantees that the legal orders require from the parties, even in the cases of judicial controversies.

Without prejudice to the foregoing, Petroleos Mexicanos and its subsidiary production companies will be able to agree on alternative means of settling disputes, clauses or arbitration agreements, in terms of applicable trade law and international treaties of which Mexico is a party.

Dealing with legal acts or contracts that have their effects or are executed outside the national territory, Mexican Petroleum and its subsidiary production companies will be able to agree application of foreign law, the jurisdiction of foreign courts in commercial matters and to conclude arbitration agreements where appropriate to the best performance of their object.

Article 116.- Petroleos Mexicanos and its subsidiary production companies will submit to the Secretariat of Energy the information requested by them, within the time limits set. This information should refer to, or be related to, those aspects that allow the Energy Secretariat to perform the functions of sectoral programming, design, formulate and follow up on public policies, plan and conduct duly carrying out strategic and priority activities in charge of the State, and exercising the functions of the State's economic rectory, in accordance with applicable laws.

Petroleos Mexicanos and its subsidiary production companies will be required to provide the coordinated energy regulatory bodies with the information they require in terms of the applicable.

Article 117.- The annual assessment that as the owner of Mexican Petroleum takes place on the performance of the company and that of its Board of Directors, including its committees, will be in charge of a Commissioner who will be an independent expert who will have the following functions:

I.               Formulate an annual global assessment of the progress and performance of Mexican Petroleum, including an analysis of the operational, programmatic and financial situation of the company, as well as the organizational structure, the unit processes and the accounting structure.

The report should be submitted to the Chamber of Deputies and the Federal Executive at the latest by 30 June each year. year;

II.              Formulate specific recommendations to the Board of Directors and the Director General of Mexican Petroleum, and

III.             To request the Director General of Mexican Petroleum for all the information necessary to render the report referred to in the above fraction I.

For the appointment of the Commissioner, the Federal Executive will ask the Mexican Institute of Finance Executives to propose a third party of persons or firms of recognized prestige that will send to the Chamber of Members. Its Political Coordination Board shall select one of the members of the party and submit the appointment of the Commissioner to the approval of the plenary, which shall be carried out by the vote of two-thirds of the members present.

The Commissioner's recruitment will not be possible for periods of five years and will be covered by the company.

To be a Commissioner you will have to meet the same requirements as an independent counsel, as well as not having been a member of the Mexican Petroleum Administration Board in the five years. prior to their appointment.

Article 118.- The profits that Mexican Petroleum and its subsidiary companies obtain are aimed at increasing the nation's income to finance the spending. public, so these utilities will not be distributed among their workers. The above, without prejudice to the fact that under labor law, they can grant their workers any incentive, compensation, bonus, gratification or commission for the performance of their duties.

TRANSIENT

First. This Law shall enter into force on the day following the appointment of the new Board of Directors of Mexican Petroleum in terms of the same and according to the Transitional Fifth next, except for what is noted in the following Tenth and Tenth Transients.

Second. With the provisos referred to in the following Transitory Tenth, as of the entry into force of this Law, the Law of Mexican Petroleum, published in the Official Journal of the the Federation on 28 November 2008, and any legal and administrative provisions which are contrary to this Law shall be repealed.

Third. As of the entry into force of this Law, Mexican Petroleum is transformed by the Ministry of Law into a productive company of the State, so it retains its legal personality, as well as the ownership of all the goods, rights and obligations that correspond to it, except those explicitly mentioned in the Hydrocarbons Act.

Fourth. All provisions, rules, guidelines, policies, criteria and other regulations issued by any organ or administrative unit of Mexican Petroleum or its subsidiary bodies shall remain in force in so far as they do not object to this Law, until such time as the competent administrative bodies or units determine their reform or abrogation.

The powers, mandates and, in general, the representations granted and the powers granted by Mexican Petroleum or its subsidiary bodies prior to the entry into force of this Law, subsist in their terms as long as they are not expressly modified or revoked.

Fifth. The Federal Executive shall appoint the new members of the Board of Directors of Mexican Petroleum, in accordance with the provisions of this Law, within the following 90 calendar days. to be published in the Official Journal of the Federation.

For the only time and to respect the staggering of this Law, the first five independent directors of the Board of Directors of Mexican Petroleum appointed in terms of this Law will last for two, three, four, five and six years, as determined by the Federal Executive in the corresponding designation.

In terms of the provisions of the third paragraph of the Twentieth Transitional of the Decree by which various provisions of the Political Constitution of the States are reformed and added United Mexican in Matter of Energy, published in the Official Journal of the Federation on December 20, 2013, as long as the designations referred to in the first paragraph of this transitional provision are made, the current councilors of the Board of Directors of Mexican Petroleum will remain in office, and cease in their functions on the day when the referred designations are made.

Persons holding the post of professional counselor at the entry into force of this Law may be appointed as independent directors in terms of the same, provided that comply with the requirements that are stated, however, according to the Law that is repealed, they have been considered public servants, for the purposes of the provisions of Article 21, fractions I and III, of this Law.

Sixth. The Director General of Mexican Petroleum in office at the entry into force of this Law shall remain in office, without prejudice to the powers provided for in this Law. for the Board of Directors and the Federal Executive in the field.

Seventh. The Board of Directors of Mexican Petroleum shall appoint the holder of the Internal Audit of the company within thirty calendar days after the Council is integrated in terms of this Act.

Eighth. In the case of subsidiary production companies and subsidiary companies, the following shall be observed:

A.             Within forty-five days following the installation of the new Board of Directors of Mexican Petroleum in terms of the previous Transitional Fifth, the Director General of the company will have to present of the Council its proposal of outline for the corporate reorganization of Mexican Petroleum.

Once the proposed proposal has been received, the Board of Directors will have up to three months to adapt and/or approve it, as provided for in this Law.

The corporate reorganization approved by the Board of Directors shall be subject to the provisions of the This Act and the following:

I.       It must provide, at least, that the hydrocarbon exploration and extraction activities carried out by the company, without association with individuals, are carried out by one or more subsidiary production companies whose object is exclusively the the development of these activities and the other related activities, in a separate way to the other activities that are part of the object of Mexican Petroleum. For such purposes, existing subsidiary bodies at the entry into force of this Law may maintain and adopt the nature of subsidiary production companies, or reorganize to form one or more new productive enterprises. subsidiaries, as determined by the Board of Directors of Mexican Petroleum;

II.      The subsidiary bodies of Mexican Petroleum companies existing at the entry into force of this Law that carry out activities other than the exploration and extraction of hydrocarbons will become subsidiary companies, provided that they are complied with. provided for in paragraph B, fractions I and II, of this transitional provision.

As long as paragraph B, fractions I and II are not complied with, the following bodies: Subsidiaries referred to in the preceding paragraph may maintain and adopt the nature of subsidiary production companies, or reorganize to form one or more new subsidiary production companies, as determined by the Board of Directors Mexican Petroleum;

III.     The Board of Directors of Mexican Petroleum shall issue and publish in the Official Journal of the Federation, the Agreements of Creation of the new subsidiary production companies, in accordance with the provisions of this Law;

IV.     Any merger or division which is determined in terms of the preceding subparagraphs I and II, second paragraph, shall take effect from the entry into force of the Agreement of Creation which the Board of Directors shall issue to the effect;

V.      The transfer of goods, rights and obligations under the corporate reorganization referred to in this paragraph shall not be considered to be in the disposal of such transmission and any other operations resulting directly from the the corporate reorganization will not be taxed by any federal tax;

VI.     The transfer of the goods, rights and obligations under the corporate reorganization referred to in this transitional article shall not be required to be formalised in public writing, and therefore the Creation Agreements shall make the title of title of ownership or of the transfer of domain, for all legal purposes, including the registration in the relevant public registers;

VII.    The new subsidiary production companies shall be subrogated in all the rights and obligations of the subsidiary bodies, as appropriate, prior to and after the date of entry into force of the Agreements of Creation which expask;

VIII.   As long as the Creation Agreements mentioned in the previous section III, the Pemex Exploration and Production, Pemex Refining, Pemex-Gas and Petrochemical Basic and Pemex-Petrochemical subsidiary organizations, will continue their operation and functioning in accordance with the Decree which aims to establish the structure, operation and control of the subsidiary bodies of Petroleos Mexicanos, published in the Official Journal of the Federation on 21 March 2012, object to the provisions of this Law. This Decree shall be without effect on the date on which the Creation Agreements enter into force, and

IX.     As from the entry into force of the Creation Agreements mentioned in the previous section III, the particulars contained in the laws, regulations and provisions of any nature with respect to the subsidiary organisms Pemex-Exploration and Production, Pemex-Gas and Petrochemical Basic, Pemex-Petrochemical and Pemex-Refining, will be understood as referring to the new subsidiary production companies that result from the corporate reorganization referred to in this transitory article.

The provisions of the above fractions V and VI shall apply exclusively for the first reorganisation Corporate that is carried out in Mexican Petroleum from the entry into force of this Law.

The corporate reorganization referred to in this paragraph A may have effects when it has entered into The special scheme under the following 10th transitional period.

B.             In relation to the paragraph of Article 59 this Law, the following is the following:

I.       Petroleos Mexicanos will be able to create or participate in subsidiary companies to which it will be able to contribute goods, rights or obligations of the subsidiary productive companies, as well as to create or to participate in new subsidiary companies, according to the article 59, third paragraph, of this Law. In any event, the creation or participation in such subsidiaries shall only be approved when the operation of the respective subsidiary is sustainable, does not represent losses to be covered by income generated by other branches of business or divisions the company, does not require budget transfers for its operation, that its labor liabilities are supported under sustainable schemes and that the necessary actions are foreseen so that the Mexican Petroleum can control the management of its debt in consistency with the provisions applicable to the company, and

II.      The provisions of the above fraction I must be approved by the Board of Directors of Mexican Petroleum. The Secretary of Finance and Public Credit may request that, prior to the decision to be taken, an opinion of an independent auditor or external consultant on the aspects mentioned in the preceding paragraph is provided.

Members of the Board of Directors shall be responsible for compliance with the provisions of this transitional provision.

Ninth. The modification of the legal nature of Mexican Petroleum, its subsidiary and subsidiary bodies, as referred to in the Decree for which several are reformed and added provisions of the Political Constitution of the United Mexican States, in Matter of Energy, published in the Official Journal of the Federation on 20 December 2013, as well as this Law, shall not affect in any way the rights of its active workers and those of their retirees and pensioners.

Tenth. The special regime provided for in this Law for Mexican Petroleum and its subsidiary companies in matters of budget, debt, acquisitions, leases, services and works, administrative responsibilities, assets, remuneration and subsidiary productive companies and subsidiary companies, will take effect until the new Board of Directors of Mexican Petroleum is in place and they are in operation of the mechanisms for monitoring, transparency and accountability provided by this Act.

For such purposes, the Board of Directors of Mexican Petroleum will notify the Energy Secretariat of the update of the assumptions mentioned in the previous paragraph, so that the issue the respective declaratory, which must be published in the Official Journal of the Federation.

As long as the declaratory stated in the preceding paragraph is issued, the legal and administrative provisions in force for the entry into force of this Law in matters of budget, debt, Acquisitions, leases, services and works, administrative responsibilities, assets, remuneration and subsidiary production companies and subsidiary companies shall remain applicable.

Without prejudice to the above paragraphs, the new arrangements for acquisitions, leases, services and works will be applicable until the new Council of Mexican Petroleum Administration issues the provisions referred to in Article 76 of this Law.

Tenth First. As long as the application is made in the first paragraph of the Second Transitional of the Decree by which various provisions of the Decree are amended, Organic Law of the Federal Public Administration, published in the Official Journal of the Federation on January 2, 2013, the Unit of Responsibilities referred to in article 90 of the Mexican Petroleum Law will depend hierarchically on the Secretariat of the Civil Service, its holder shall be appointed by such dependence and shall be governed by its organisation, operation and operation in accordance with the provisions applicable to the areas of responsibility of the internal control bodies.

When the transitional provision referred to in the preceding paragraph is applied, the organization, operation and operation of the Unit of Responsibilities shall be governed by the provisions of the legal order to be issued.

Tenth Second. The procurement procedures of Mexican Petroleum or its subsidiary bodies that have been initiated under the laws of Acquisitions, Leases and Public Sector Services and Public Works and Services Related to the Mismas, will continue to be processed until their conclusion in accordance with the provisions of these orders, as appropriate, until their total conclusion.

Tenth Third. The contracts, agreements and other legal acts concluded by Petroleos Mexicanos and its subsidiary bodies, which are in force for the entry into force of the This Law shall be respected in the agreed terms. Notwithstanding the foregoing, Mexican Petroleum and its subsidiary bodies or subsidiary production companies resulting from the corporate reorganization to be determined by the Board of Directors in accordance with the previous Eighth Transitional to agree to amend them to comply with the provisions of this Law and other applicable laws, based on the guidelines issued by the Board of Directors of Mexican Petroleum and without prejudice to the provisions of the Law of Hydrocarbons.

To integral contracts for the exploration and production of hydrocarbons that Mexican Petroleum and its subsidiary organizations have concluded prior to the entry into force of the This Law shall apply to them as provided for in Article 76 (X) of the Act, as from the publication of this order.

Tenth Fourth. Articles 97 to 99 of this Act will enter into force on January 1, 2015, so the state dividend will begin charging in fiscal year 2016.

To ensure a responsible management of public finances, the state dividend determined by the State for the fiscal year 2016 shall be at least 30% of the revenue after taxes generated by Petroleos Mexicanos and its subsidiary production companies during the year 2015 for the activities subject to the Law of Revenue on Hydrocarbons. The minimum level indicated will be reduced for the following financial years to 15% in the year 2021 and 0% in the year 2026. From the year 2027, the provisions of this Law will be in place.

As long as the articles mentioned in the first paragraph come into force, they will be applicable in respect of Mexican Petroleum and its subsidiary organizations or productive enterprises. subsidiaries, during the fiscal years 2014 and 2015, the powers provided for in the fourth and fifth paragraphs of Article 26 of the Hacendaria Federal Budget and Accountability Act and in Article 6o. of the Revenue Law of the Federation for Fiscal Year 2014 and the one corresponding to the fiscal year 2015.

Tenth Fifth. The majority state participation companies Company Mexicana de Exploraciones, S.A. de C.V.; I.I.I. Services, S.A. de C.V.; Real Estate Facilities Industrias, S.A. de C.V., and P. M. I. Comercio Internacional, S.A. de C.V. shall maintain the nature and the operating system at the entry into force of this Law, except as provided for in Articles 48 and 49 of the Organic Law of the Federal Public Administration. The foregoing, without prejudice to the powers that the Board of Directors of Mexican Petroleum may exercise in respect of such companies, in accordance with the provisions of this Law.

Tenth Sixth. The human, financial and material resources required to comply with the provisions of this Law will be covered by the approved oil budget. Mexicans.

Tenth Seventh. Petroleos Mexicanos, its subsidiary organizations and subsidiaries, with the participation of union representation, will establish the mechanisms that are necessary for the proper training of their human resources, in order to guarantee its effectiveness, productivity and competitiveness in the hydrocarbon industry and in the achievement of its object.

Tenth Eighth. The budgetary and debt procedures initiated by the Mexican Petroleum and its subsidiary bodies prior to the entry into force of the special regime in these matters, as indicated in the previous Transitional Tenth, shall be governed by the provisions in force at the time of their commencement, until their complete conclusion.

...

TRANSIENT

First. This Decree shall enter into force on the day following its publication in the Official Journal of the Federation.

Second. Reforms to the Laws of Procurement, Leases and Public Sector Services and Public Works and Services Related to the Mismas referred to in the fourth and fifth articles of this Decree, shall enter into force for Mexican Petroleum and the Federal Electricity Commission and their respective subsidiary production companies, in accordance with the declaration issued by the Energy Secretariat in terms of the Tenth Transitional the Mexican Petroleum Law provided for in the first article of the present Decree and the Tenth Fourth Transitional of the Law of the Federal Electricity Commission provided for in the second article of this Decree.

Third. The reform of Article 3. of the Federal Law of the ParaState Entities shall enter into force at the thirty calendar days following the entry into force of this Decree.

Mexico, D.F., at 5 August 2014.-Dip. José González Morfin, President.-Sen. Raul Cervantes Andrade, President.-Dip. Javier Orozco Gómez, Secretary.-Sen. Lilia Guadalupe Merodio Reza, Secretary.-Rubicas."

In compliance with the provisions of Article 89 (I) of the Political Constitution of the United Mexican States, and for its due publication and observance, I request this Decree in the Residence of the Federal Executive Branch, in Mexico City, Federal District, at 11 August of two thousand fourteen.- Enrique Peña Nieto.-Heading.-The Secretary of the Interior, Miguel Angel Osorio Chong.-Heading.