ON A MISSION

Mexico is on a clear mission to bring back the glory days of Pemex and to do so in a centralized manner. One of the country’s most urgent tasks is to increase exploration and thus restore the declining levels of production at the national oil company. The previous administration’s strategy in this matter centered around bidding rounds that promoted private investment, while the current administration has changed the game plan by canceling tenders and announcing a large investment plan toward refineries in Mexico. “Pemex is back to increasing its oil exploitation and refining activities This is not to say that the private sector can not get involved in these activities, but it would be mainly by partnering with Pemex in various forms of mutually beneficial associations,” explained Rafael Espino de la Peña, Independent Member of the Board of Pemex. He told The Business Year that the main goal is to increase production as Mexico is rich in fossil fuels but the challenge is to find the best legal instrument to attract urgently needed private investment. Another factor behind the government’s decision to put bidding rounds on pause was the lack of results in increasing overall production in Mexico, but the private sector is confident its investment will soon bear fruit. “We hope the president will realize we need new blocks to be built with the involvement of the private sector,” said Luis Vázquez, Board Chairman of Diavaz, the second-largest producer of hydrocarbons in Mexico. “We have told the president that, at the end of the six-year period of the current administration, the oil industry will produce abut 280,000bdp minimum.” The change of plans in the sector has motivated players to seek more stable niches in the market. Companies are diversifying their portfolios into either renewable energy, storage terminal construction, and even expanding internationally. “The mentality of staying in one’s own country, seeing what happens, and growing with the country is not enough,” said Giacomo Bonfanti, Business Development Director & Deputy CEO of GDI. “If you want to grow and if you want to go far, the world is your oyster.” While change continues to be a constant for the oil and gas industry as public policies wane, oil prices remain at historically low levels, and the renewable energy movement continues to gain momentum, the sector is taking advantage of the pause to transform its processes and increase collaboration.