Oil production has been the most important extractive activity in Mexico since the 1970s, and petroleum generated 33 percent of government income and 20 percent of exports in 2011. While Mexico remains one of the top producers in the world, oil exports have declined as fields are depleted and domestic consumption rises.

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Mexico's Performance on the Resource Governance Index

Mexico received a "satisfactory" score of 77, ranking 6th out of 58 countries, the result of high scores on all components except on the Enabling Environment.

Rank (out of 58)		Score (out of 100)
6	Composite Score	77
6	Institutional & Legal Setting	84
Freedom of information law 100 Comprehensive sector legislation 100 EITI participation 0 Independent licensing process 100 Environmental and social impact assessments required 50 Clarity in revenue collection 100 Comprehensive public sector balance 89 SOC financial reports required 100 Fund rules defined in law 100 Subnational transfer rules defined in law 100
7	Reporting Practices	82
Licensing process 33 Contracts 33 Environmental and social impact assessments 50 Exploration data 100 Production volumes 100 Production value 100 Primary sources of revenue 100 Secondary sources of revenue 67 Subsidies 100 Operating company names N/A Comprehensive SOC reports 100 SOC production data 100 SOC revenue data 83 SOC quasi fiscal activities 100 SOC board of directors 100 Fund rules 100 Comprehensive fund reports 33 Subnational transfer rules 100 Comprehensive subnational transfer reports 67 Subnational reporting of transfers 100
8	Safeguards & Quality Controls	81
Checks on licensing process 50 Checks on budgetary process 67 Quality of government reports 87 Government disclosure of conflicts of interest 100 Quality of SOC reports 100 SOC reports audited 100 SOC use of international accounting standards 100 SOC disclosure of conflicts of interest 100 Quality of fund reports 67 Fund reports audited 100 Government follows fund rules 33 Checks on fund spending 100 Fund disclosure of conflicts of interest 100 Quality of subnational transfer reports 50 Government follows subnational transfer rules 67
18	Enabling Environment	53
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 45 Open Budget (IBP Index) 61 Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 61 Government effectiveness (WGI) 62 Rule of law (WGI) 34

Institutional & Legal Setting (Rank: 6th/58, Score: 84/100) learn more

Mexico's extractive resources are governed by a strong legal framework, leading to a "satisfactory" score of 84.

By law, the state-owned oil company Petróleos Mexicanos (Pemex) dominates the industry. There is no licensing process, though Pemex does sign service contracts with other companies. Some contracts are awarded through competitive bidding, but Pemex may also sign agreements through a non-competitive "direct award" process.

The National Hydrocarbon Commission regulates the sector, while the Energy Ministry oversees Pemex's activities and sets policy. The Finance Ministry collects taxes and other revenues and transfers them to the treasury. The Federal Transparency and Access to Information Law requires comprehensive disclosure of industry information; environmental impact assessments are also required.

Reporting Practices (Rank: 7th/58, Score: 82/100) learn more

Mexico received a "satisfactory" score of 82, reflecting comprehensive disclosure on many revenue indicators but poor contract transparency.

Only limited information on Pemex's subcontracting policies is published before contracts are awarded. Information on the selection process is not always available, and service contracts are not published.

Comprehensive industry data are available online, but reports can be difficult to understand and information must be pieced together from different agency websites. The Finance Ministry publishes disaggregated data on payments received from Pemex, export values, production costs, and the cost of subsidies. The Energy Ministry and the National Hydrocarbon Commission publish reports on the petroleum sector, but rely on information from Pemex.

Safeguards & Quality Controls (Rank: 8th/58, Score: 81/100) learn more

Mexico's "satisfactory" score of 81 is largely due to substantial audit requirements that are not always effective in practice.

Pemex officials exercise considerable discretion in the subcontracting process. Congress oversees Pemex's activities and must approve the company's budget. Lawmakers have no responsibility to review service contracts, but may request information from Pemex officials.

National audit organizations have the power to review all government accounts, including those of Pemex. In practice, however, auditors lack the capacity to effectively oversee the oil sector and review only a small fraction of public funds. The Supreme Audit Institution presents lawmakers with annual reports, but the figures are often at least a year old. Several legislative committees review audit reports but do not focus specifically on resource revenues.

Enabling Environment (Rank: 18th/58, Score: 53/100) learn more

With a particularly low ranking for the rule of law, Mexico received a "partial" score of 53, its lowest on any component.

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State-Owned Companies (Rank: 2nd/45, Score: 98/100) learn more

Pemex is entirely government-owned and has a legal monopoly over petroleum exploration, production and commercialization. The company publishes information on reserves, field-by-field production volumes, prices, export values, investment, production costs, social payments made to local governments in producing regions, disaggregated revenues, and payments to the government. Some of this information is buried in highly technical reports. Pemex's accounts are audited in accordance with international standards and audit reports are made public.

Natural Resource Funds (Rank: 6th/23, Score: 79/100) learn more

Oil prices have exceeded the price estimated in the national budget each fiscal year since 2006, resulting in additional revenues. In 2002 the government created the Oil Income Stabilization Fund to ensure continued investment in Pemex. The fund is one of four stabilization funds that by law must receive any surplus oil revenues; it is administered by the Finance Ministry. Rules for deposits and withdrawals are defined by law, but Congress has approved changes allowing the fund to cover Pemex's operating expenses. Basic financial data are published quarterly and presented to Congress.

Subnational Transfers (Rank: 8th/30, Score: 81/100) learn more

The governments of oil-producing states receive a portion of extractive revenues through direct transfers. There are no conditions on how these transfers are spent and financial data are not published. However, the bulk of subnational transfers are made through the central government's normal revenue distribution processes. These transfers are based on population and economic needs and come out of the general budget, which combines petroleum receipts with other sources of national income. Information on these disbursements is published quarterly by the Finance Ministry.

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Composite Score