Interview: José Antonio González Anaya
In the context of energy reform, what steps are being taken to ensure that the Mexican oil industry remains competitive?
JOSE ANTONIO GONZÁLEZ ANAYA: The president has given two indications about the energy reform: that Pemex’s operational dynamics will change to meet the changing price environment, and that the reform’s implementation will be accelerated. Naturally, these two have to go handin-hand because there can’t be a healthy energy sector if the largest company – in this case Pemex – does not have a base of sound finances.
Key international investors have a number of emerging markets in which to invest their money internationally. In spite of the evident uphill challenges, Mexico remains an attractive investment destination, which is well linked and has been newly opened up. For over six decades only Pemex could produce oil in Mexico. The opening up of the sector presents a wealth of opportunities. The Gulf of Mexico, especially in the south of the basin, is underexplored, with reserves that are relatively cheap and easy to access.
To ensure successful development in this sector, competitive contracts need to be offered by the government and Pemex to both local and international companies. In addition, international companies need a solid associate who has the infrastructure to make their investments worthwhile. Therefore Pemex, as the principal firm in the energy sector, has to provide attractive conditions for these companies in all areas.
For example, in the upstream segment, Pemex is exploring tailoring standardised joint operating agreements to the Mexican market. Pemex also has a huge interest in refineries, logistics and distribution. How will the transition to a productive state company allow Pemex to increase its flexibility and executive capacity in financial matters?
GONZÁLEZ ANAYA: The reforms had the most noticeable effect of transforming Pemex from a parastatal firm to a productive state company, which meant a change of mandate for the company. In the past, Pemex was often involved in activities that weren’t financially viable or profitable. Now, the mandate of Pemex is to be profitable while being governed by a board that is evenly split between independent and government board members. These processes take time, but the energy reform has laid the foundations for Pemex to become a productive and competitive company.
In terms of pensions, we have developed a strategy with different pension parameters for different classes of workers. This will help address the demographic and social issues that are being created by the changes in Pemex. These crucial changes to pensions are a key part of Pemex’s evolution. As well as increasing productivity, they will reduce the company’s liability and provide a more solid long-term fiscal foundation.
How will the new dynamic of Mexico’s energy sector create changes in human capital development over the medium term?
GONZÁLEZ ANAYA: One of the most important assets held by this company and this sector is its human capital. After all, the workers and engineers of Pemex practically built the oil industry of this country. Inevitably, there will be challenges that arise from adapting the existing workforce to the new post-reform climate; however, it is imperative that the new formula retains the organisation’s well-established workers, while aiming to use the reforms to spur a new drive towards greater efficiency and innovation.
For example, the Mexican portion of the Perdido Foldbelt in the Gulf of Mexico, the Trion field, contains some 480m barrels of reserves and currently requires around $11bn worth of further investment. Even though Pemex will not be operating this field, the company has staff there learning and implementing the technologies and processes of this particular case, with the intention of operating similar fields in the future.
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