Energyboardroom.com Releases New ‘Inside Oil and Gas’ Mexico report
26.09.2014 / Energyboardroom
In August this year, the secondary laws detailing the specifics of the Mexican energy reform became law. EnergyBoardroom was on the ground in the country in order to gauge the reaction of key oil and gas opinion leaders to these reforms. The results are published in ‘Inside Oil & Gas’ Mexico edition, which is available on EnergyBoardroom.com today for free download.
One of the biggest changes introduced by this new round of reforms is the reshaping of Pemex’ Mexico’s state oil producer. “Many people erroneously believe that we are simply renaming the same old Pemex and casting it adrift in the open market. This is actually far from the case,” explains Lourdes Melgar, Mexico’s deputy secretary of energy for hydrocarbons. “The fiscal terms have been modified to afford Pemex a tax break and greater budgetary autonomy, and the rules governing joint ventures significantly freed-up enabling the NOC to migrate its entitlements into contracts.”
“The fiscal terms have been modified to afford Pemex a tax break and greater budgetary autonomy, and the rules governing joint ventures significantly freed-up enabling the NOC to migrate its entitlements into contracts.” – Lourdes Melgar, Mexico’s deputy secretary of energy for hydrocarbons
Within Pemex, however, the mood is not quite as optimistic. According to Fluvio Ruiz, an independent director on Pemex’s board, the company risks finding itself “trapped in a no-man’s land where it doesn’t enjoy the privileges of being an autonomous actor, but still has all of the responsibilities of being a public organization attached to the state.”
For Pemex Exploration and Production (PEP), the main task created by the restructuring has been to define what reserves it needs to create a sustainable production environment for the medium- and long-term while simultaneously leaving enough space for the industry to develop and monetize reserves to the benefit of the nation. Round Zero was the name given to the process where Pemex would decide which of its reserves it would keep, and which it would farm out to third parties. “Round zero represents, without doubt, one of the most important decisions in the entire lifespan of Pemex and marks the first step towards transforming our way of thinking,” remarks PEP’s Director General, Gustavo Hernandez.
In general, the reaction from the private sector to the secondary legislation has been extremely positive. “I am exceedingly bullish about what is happening to the Mexican energy sector and how this will translate into exponential growth for Apollo,” declares the Constantino Galanis, CEO of Quimica Apollo. “The cheaper energy that this reform will produce is going to be a real catalyst to the national economy as a whole by rendering virtually all products more competitive and thus represents an unprecedented opportunity for spreading wealth and prosperity,” he explains. “Mexico has become the place to be in Latin America,” asserts the Managing Director of C&C Technologies, Jose Aguilar. “Brazil was like a supernova star that, after huge amounts of hype, collapsed and burnt. Now all eyes are on this country. Nowhere else in the region holds quite the same raw potential as Mexico on the eve of liberalization,” he remarks.
Fluvio C. Ruiz Alarcón, Board Member of Pemex
Edgar Rangel, Commissioner of the CNH
Merethe Nergaard, Norwegian Ambassador to Mexico
Lourdes Melgar, Deputy Secretary of Energy for Hydrocarbons, SENER
Miguel Messmacher, Undersecretary for Revenues at SHCP
Arturo Henriquez, Chief Procurement Officer, Pemex
Vinicio Suro Pérez, Director General Instituto Mexicano del Petroleo (IMP)
Gustavo Hernández Garcia, Director General Pemex Exploration & Production
Bruno Portilla Piris, General Manager, London Offshore Consultants
Hernando Gomez De La Vega, President, Reliability & Risk Management
Constantino Galanis, CEO, Quimica Apollo
David Pring, Country Manager, Petroleum Geo-Services
Dominique Gehant, Geomarket Director, CGG
Sergio Beristain, Partner and Founder of Beristain y Asociados