Monterrey 2014 Blog: Energy Reforms in Mexico - Implementation and Opportunities Panel

By
Carin Zissis

In the wake of reform, how will success be measured in Mexico's energy sector? Panelists shared their perspectives on this and other issues.

Dean of the EGAP Government and Public Policy School Alejandro Poiré led a conversation on what reform means for Mexico's energy sector.

Speakers:

  • Alejandro Poiré, Dean of the School of Government and Public Transformation, Tecnológico de Monterrey (moderator)
  • Benigna Leiss, Country Manager, Chevron Mexico
  • Ernesto Marcos, Founding Partner, Marcos y Asociados
  • Raúl Millares, Energy Manager, Alfa
  • Antonio Souza Saldivar, Senior Managing Director Energy Area, Evercore Partners Mexico

Poiré asked the panelists to share their views on a variety of topics relevent to the energy reform, including what they find most inspiring and most worrisome about the new legislation, how to measure the reform's success, what a drop in the price of oil means for the sector, and the role of the reform in North American energy integration. 

Chevron's Benigna Leiss signaled that new laws and institutions are good, but a challenge exists when it comes to completing implementation. She also signaled that human capital remains a hurdle and warned of the need for patience, given that production and exploration take time.

Marcos y Asociados’ Ernesto Marcos agreed on the obstacle of human capital, adding that private-sector participation is needed. He said that there must be a cultural change requiring leadership and education when it comes to the reform, given the change it brings. 

Evercore Partners Mexico’s Antonio Souza Saldivar commended the speed of the law’s implementation, saying that initiating Round One's bidding process so quickly after the reform's approval signaled the opportunity of “hitting the ground running.” He cautioned that the portion of the reform covering the energy sector is less clear and that the rules of the game need to be defined. 

Alfa’s Raúl Millares praised the reform, but expressed concern over how contracts will be implemented. He expressed optimism that the reform could result in a competitive industry. In particular, he noted that access to lower-cost energy will boost Mexico's manufacturing sector.

Souza said a measure of success for the reform will be reversing the decline in oil production, as well as an electrical sector offering lower costs. He forecast that, come 2016, North America's energy sector will be strongly integrated, offering a boost for Mexico's economy. Both he and Marcos also pointed to the possibility of taking advantage of the Pacific market. Leiss signaled that the reform's success will also be measured by large quantities of investment in Mexico's energy sector. 

Watch the video: