H.E. Merethe Nergaard, Norwegian Ambassador to Mexico
The ambassador speaks out about how the Norwegian model for petroleum resource management is directly applicable to the Mexican context, and how Statoil can serve as a template for Pemex as it embarks upon the transition from state entity to competitive national oil company. She introduces the latest developments in bilateral energy engagement and offers insights into how the proceeds of wealth generated by the forthcoming energy reform could be equitably distributed across the regions.
Could you please comment on Norway’s presence in Mexico and the evolution of diplomatic relations between the two countries?
Norway first established diplomatic relations with Mexico back in 1906 subsequent to our independence and we have maintained an embassy in Mexico City ever since 1910. Our initial relations were characterized by friendship and respect, but tended to be a little distant. Our main interaction was generally limited to Norwegian vessels calling in at the port of Veracruz and to trade in cod.
Nevertheless we must remember that our two countries have always shared common elements. Norway is a country located in the far north of Europe that benefits from the hot water currents originating in the Gulf of Mexico. Without the warming effect of this ‘Gulf Stream’, it would have been almost impossible for our people to survive. The sea is not so much a barrier between our two countries, but rather a bridge that links us. For centuries this same sea has sustained many Norwegians and Mexicans alike, originally for fishing and boating, and in the last 40 years also for the extraction of oil and gas.
In recent years, we have reinforced our ties and strengthened the relationship. Nowadays we collaborate closely on a whole range of multilateral issues. Not only do we share views on many issues such as climate and humanitarian affairs, but we have also been coordinating our positions within the United Nations on matters such as human rights and disarmament. Given that we are both major petroleum producing countries, it also makes a lot of sense to cooperate on energy issues. My predecessors have been quite active in promoting exchanges in best practice and expertise in the oil and gas sector and this is something I am keen on consolidating and developing further.
Meanwhile the Mexicans are beginning to recognize the benefits of establishing a presence in Oslo and this Spring the first Mexican embassy in Norway is due to be formally opened. A friendship group within the Mexican parliament has also been set up and is testament of the desire to deepen our relations.
You have now been Norwegian Ambassador to Mexico for roughly eight months. What are your priorities and goals going forward?
This is a relatively small embassy so it is important for us to prioritize and define strict objectives. The main focus for the short and medium term is to increase trade and investments between the two countries. We already have a free trade agreement in place from 2001 through our membership of the European Free Trade Association (EFTA), but we want to upgrade this by including trade in services. Our other main priority is to focus on and contribute to the respect for human rights, rule of law and freedom of speech through the support of various civil society projects.
Norway does not yet have as many enterprises in Mexico as the Swedes and the Danes. This is because we have traditionally been focusing on other markets such as Brazil and Asia, and we have been waiting for the landmark energy reforms to reach fruition. In the past we have probably not been diversified enough, but this is something that we are actively changing and meanwhile Mexico is becoming much more strategically important.
One initiative that we would hope to introduce in the future is a trade platform akin to what some of the other Nordic countries have. In some countries we already have an institution called ‘Innovation Norway’ which reports to the Ministry of Trade and industry and is devoted to promoting exports abroad and regional development within Norway. No such branch yet exists in Mexico and therefore the responsibility for trade promotion falls mainly to our embassy. What we do have here in Mexico, however, is a local INTSOK office which is dedicated establishing joint relations in the specific area of oilfield services and together we will be increasingly active in promoting bilateral energy engagement.
There has been much Mexican interest in the Norwegian model for managing petroleum resources. In May last year the then Norwegian Energy Minister Ola Borten Moe was even invited by the Mexican authorities and Pemex to deliver a seminar to this effect. Could you please elaborate upon the collaborative efforts between the two countries in the oil and gas sector?
It is certainly true that there has been a lot of interest from the Mexican side in learning from the Norwegian experience in developing an oil and gas sector that benefits the whole nation. We are very pleased to see many of our innovations and ideas have inspired Mexico. We hope that the present energy reforms will produce positive results.
Of late, there has been a lot of bilateral exchange of officials, decision makers and experts in the energy sector. Last spring, the Mexican Energy Minister visited Norway and this was followed up by a delegation of Mexican senators during the summer. During the same time period, Minister Ola Borten Moe came to Mexico to deliver a seminar on the Norwegian oil management model. We are happy to share our experience and firmly believe that pooling our know-how and recounting our respective experiences benefits both sides.
There has also been a lot of interest in our companies and Statoil in particular and this is something that the Embassy, in conjunction with the Nordic Chamber of Commerce, is seeking to build upon by facilitating trade delegations and industry events. The ambitious energy reform agenda might imply opportunities for Norwegian oil field service firms in Mexico in the future and already we foresee manyNorwegian businesses readying themselves for entry into the newly liberalized market. One of the key tasks on our work list will therefore be to assist companies from Norway integrate into the Mexican business arena.
Much of the energy reform debate seems to center around the retention of value within Mexico’s borders. Considering Norway’s success at distributing its oil and gas wealth to its people, how can Mexico strike the right balance?
Fair distribution of the proceeds of oil and gas wealth is very important and also rather challenging to enact. Incoming technology and investment from abroad was instrumental in developing the Norwegian oil and gas sector and ultimately in generating wealth that could then be reinvested back into Norwegian society. The current energy reforms should hopefully produce a similar effect here in Mexico, but it will be necessary to have the right mechanisms in place to ensure the trickle down of revenues accrued so that the regions also partake in the benefits.
I recently visited the provinces of Campeche and Tabasco and was struck by how much that remains to be done in terms of infrastructure development. This is because the taxes paid by oil and gas firms and service providers operating in those regions are directed towards Mexico City instead of the local communities. This contrasts starkly with Norway’s oil and gas towns such as Stavanger which happens to be one of the richest and most developed cities in the country. This is obviously a sensitive issue and Mexicans must choose their own model, but there are many examples round the world of equitable growth that could be well applied under the present context.
Norwegian companies enjoy an excellent reputation globally for their efficiency and integrity. Statoil is no exception and can also be considered a benchmark in terms of transparency, social principles and safety standards. It therefore makes a lot of sense for Pemex to interact with Statoil as it embarks upon the transition to a competitive National Oil Company (NOC). Equally, Norwegians can learn much from the work ethic of the engineers at Pemex who are renowned for their resilience, assertiveness and industriousness.
What advice would you give to Norwegian firms aspiring to enter the Mexican energy market?
It is important to exercise patience, to establish a local presence and to forge local contact networks because the Mexican way is very people-centric. You can’t engage in business here remotely from afar. My advice is also to remain true to Nordic values. It is perfectly possible to be successful in Mexico and at the same time operate in a transparent manner with zero tolerance for corruption. Also I would invite Norwegian firms to get in touch with the Embassy for a chat about local conditions. We can also be helpful in establishing useful contacts and meeting-places.
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