NATIONAL CONTENT

September, 2015

Mandate

Create a Specialized Unit

1 2

3

45

Establish a methodology tomeasure national Content and verify its compliance.

.

Collect information to measure national content for hydrocarbon and electricity industries

Design strategies for: - Industrial development - Supplier development- Attracting investment

Create an Advisory Board to assist in the design of policies to foster development of domestic suppliers.

Create a fund to strengthen national suppliers and contractors.

6 Create a national registry of domestic suppliers to identify their development needs.

Art 125. Advisory board

Art 125. Public Policy

Art 46. InformationArt 46. National Content

Art 127. Trust Fund

Art 125. Supplier Registry

Published August 11, 2014

(TRANSITIONAL EIGHTEENTH)

1

National Content Methodology

Mandate: To ensure that each contract for exploration and extraction of hydrocarbons includes a minimum percentage of local content.

Purchase of domestic goods

Domestic Labor

Services

Technology transfer

Training

Infrastructure

Sources of local content:

2

National Content Methodology

𝑷𝑪𝑵=𝑪𝑵𝑩+𝑪𝑵𝑴𝑶+𝑪𝑵𝑺+𝑪𝑵𝑪+𝑻𝑻+ 𝑰

𝑩+𝑴𝑶+𝑺+𝑪+𝑻𝑻+ 𝑰×𝟏𝟎𝟎

Percentage of local content

Mexican Local Content

Goods Labor Services Training Technology transfer Infrastructure

2015 2025

25% 35%

Exploration and Extraction of Hydrocarbons 3

Expenses incurred in Mexico to improve the urban and rural environmentInvestment in national territory

Expenditures on the transfer of knowledge to improve the

effectiveness and efficiency in the production of a good, the

implementation of a process or the provision of a service

Porvided to national workers

National goods and labor used in services

Payroll of National workers

Accumulated value of transformation made in Mexico

along the whole supply chain

Goods Labor Services Training Technology transfer

Infrastructure

4

Methodology for calculating local content

Verifying local content

Ministry of Economics

(Own resources)

Support from third parties

Verify compliance of requirements in each contract.In case of default, the National Hydrocarbons Commission will be notified and the sanction established in the contract will be

applied.

Hybrid scheme

5

Supplier Development

Implement a supplier development program supported by:

Public Trust to improve National Suppliers and Contractors´ capacity

Promote the development and competitiveness of local and national suppliers and contractors, through financing schemes and support programs for training, research and certification, in order to close the gaps in technical capacity and quality, with attention to small and medium enterprises

Showcase national companies interested in participating in the industry and identify their development needs

Supplier Registry

6

Advisory Board

Advisory Board for the Electricity Industry

Advisory Board for the Hydrocarbon Industry

Members of the Board- Ministry of Economics- Ministry of Energy- National Hydrocarbons

Commission- Energy Regulatory

Commission

- Ministry of Economics- Ministry of Energy- Energy Regulatory

Commission

CCE, CANACINTRA, CONCAMIN, COPARMEX, CONCANACO-SERVYTURUNAM, SISTEMA ITESM, UVM

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