Picture courtesy of www.mexico.vg

One question that is rarely asked in Mexico is how well Pemex adapted to the changes that it was forced to undertake as a result of the 2008 energy reform and the subsequent, so-called Pemex Law. The Mexican Energy Ministry thinks that Pemex has done a remarkable job of adapting in such a short time, according to the Ministry’s Director General of Exploration and Exploitation Eduardo Camero: “Pemex has been criticized for the way that it handled Chicontepec, but I think that it hasn’t received the recognition for being very open to criticism and suggestions on how it could better develop Chicontepec. The CNH has been adamant about implementing the changes it suggested, and Pemex was very receptive to these changes, something it has not received enough recognition for as a large company where quick changes are often difficult,” he said to New Energy Connections in a recent interview.

But is this the case? Camero there have been difficulties in adjusting to the beginning of the end of Pemex as a self-regulating entity. “For the last 70 years, Pemex was held accountable only in terms of results, not in terms of regulation. Adjusting to the new way of operating is taking some time, but you cannot expect such a large company to do this from one day to the next. Clashes are inevitable; sometimes the two organizations [Pemex and the CNH] have clashed when Pemex believes it is complying with the new regulator when actually they are not.”

Juan Carlos Zepeda Molina of the CNH expresses similar views to Camero: “Right now, you have PEP taking their own decisions without a well-defined counterbalance in their corporate practices. You have a regulator trying to jump in and counterbalance but not there quite yet, and you have an E&P subsidiary with a short-term focus, taking their own decisions. We are moving forward, but we are not there.”

Both parties are positive about the fact that Pemex WILL eventually adjust to the introduction of new regulating bodies, and new corporate practices, and judging by Zepeda Molina’s reaction, the new regulator seems to understand that the state owned company was always going to suffer from inertia following such changes, given that it has operated in one way for so long. The important questions to ask are what will have to happen before Pemex approaches its new mandate correctly, and what will happen if they have not adjusted to these changes before the next set of reforms are potentially introduced by the new government of 2012?

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