During the six years that Felipe Calderón has been president of Mexico, three different people have led the country’s Energy Ministry. Georgina Kessel Martínez, an economist who had previously been head of the Mexican Mint, joined Calderón’s cabinet in 2006 as head of the Ministry of Energy. She was instrumental in pushing through the 2008 Energy Reform and 2009 Pemex Law, and was widely praised as a Minister who understood the importance of reform for the future of the Mexican oil and gas industry. In January 2011, Kessel Martínez left the Energy Ministry to become General Director of Banobras, Mexico’s state-owned National Works and Public Services bank.
Kessel Martínez was succeeded by José Antonio Meade Kuribreña, a doctor in economics who previously served as the head of the Finance Ministry’s banking unit and as the head of ﬁnancial planning for Mexico’s pension fund regulator. Meade Kuribreña was Energy Minister for nine months in 2011, and oversaw the signing of the ﬁrst incentive-based contracts between Pemex and third parties; it was an important milestone in the country’s oil and gas development. In September 2011, Meade Kuribreña left the Energy Ministry to become Finance Minister, and was replaced by Jordy Herrera Flores, former Director of Pemex Gas and Petrochemicals and Subdirector of Energy Planning and Technological Development at the Energy Ministry.
Herrera Flores has spent a little more than a year in the position, and has tried to foster investment in the sector. Even though the awkward timing of his nomination – a year away from Calderon’s departure from the Presidency – might indicate that he was appointed there to boost his personal political career, Herrera Flores has introduced interesting projects, such as the Sener-Conacyt Hydrocarbons Fund, and has given his point of view on the changes needed for Pemex to succeed.
The role of Energy Minister has always been important in Mexican politics (Calderón was Energy Minister before his presidential bid), but in the current environment the role is crucial; a safe and steady pair of hands at the wheel could help to successfully guide Mexico through a period of deep energy reform. Although previous Energy Ministers have been well-qualiﬁed for the job and have achieved impressive results during their time in office, it seems as if the position of Energy Minister is still considered to be just a rung on the political career ladder, a position sometimes given to politicians with little to no experience in the energy sector, and not often occupied for very long.
Something similar happens with the position of CEO in Pemex. Stability hasn’t been a factor included in the job description, since the position is heavily scrutinized by the Mexican people. During Calderon’s administration, there have been two different people occupying the position. In 2006, Jesús Federico Reyes-Heroles joined Calderón in his cabinet, after spending most of his career in different political positions. He was one of the most transcendental members of Ernesto Zedillo’s cabinet, back in 1994, occupying positions including the Director of Banobras, the Minister of Energy, and the Mexican Ambassador in the United States. During his term, Reyes-Heroles pushed for an Energy Reform to open the Mexican oil market to the possibility of private investment, and is currently regarded as one of the personalities that best understands the implications of such a reform. In 2009, he left Pemex to pursue a career in the private sector, becoming Executive President of StructurA, a member of several administrative boards, and Consulting Counsels for Latin America at Deutsche Bank and Energy Intelligence Group.
Reyes-Heroles was succeeded in the position by Juan José Suárez Coppel, another doctor in economics who previously served as CEO for Mexican company, Grupo Modelo. Suárez Coppel spent most of his career in the private sector, so his nomination came a bit as a surprise for the market. During Suárez Coppel’s tenure, Pemex refocused its budget on Exploration and Production, reaping the benefits just a few months before Calderon’s departure.
One issue that becomes apparent when looking at the tenure of the key positions in Mexico’s energy sector is that no one stays in one position for very long. Indeed, even if an Energy Minister or Pemex CEO were to stay for the full term of six years, with no chance of re-election for politicians, strategy becomes focused on short-term planning, with no loftier goals considered or catered for.
In finance, an ‘agency problem’ is defined as a conflict of interest inherent in any relationship where one party is expected to act in another’s best interests. The Minister of Finance and the CEO of Pemex are expected to deliver, in a sense, energy safety and welfare to the country. At the same time, they are self-interested and motivated to act to enhance their own careers, or satisfy the whims and desires of the politicians above them.
The success of the previous Energy Ministers and CEOs of Pemex has consisted of working under pressure to deliver quick results and boost their political résumés. This is definitely not in the best interests of the country, despite managing to deliver progress in the energy sector for the country. Blame should not be ascribed to these individuals, as they have been placed in positions where they have to present quick results, leading them to develop short-term strategies to achieve them.
In an ideal Mexico (at least from the author’s point of view), we need to be able to have people in those positions as capable as the ones that have been nominated in the last few years, but with a more open and panoramic view of the effects of their long-term strategies. Political agendas and personal careers could come as a by-product of solid strategies delivered that put a mark on Mexico’s future. If this is achieved, Pemex will start to look more like a corporate business, instead of a governmental branch.
On Friday December 1st, at 15:00 hours, the new Minister of Energy (Pedro Joaquín Coldwell) and CEO of Pemex (Emilio Lozoya Austin) were announced. The author personally has faith that the new government will look out for the country, with a renewed sense of accountability that the Mexican people have been asking for. This can start with longer-term visions into the most important sectors of the country.
We expect the new men responsible of the energy sector, Joaquín Coldwell and Lozoya Austin, to become these agents of change on the vision of energy for Mexico. Here is a look at them and why we believe they could be the right men for the job of changing Mexico’s oil and gas trajectory.
Minister of Energy: Pedro Joaquín Coldwell
Pedro Joaquín Coldwell may have been a surprising choice for the position of Minister of Energy, since he has no previous experience in the energy sector. However, he was one of the closest people to new President Enrique Peña Nieto during his presidential campaign.
Joaquín Coldwell had to rescue the PRI from the scandal of document forgery to raise Coahuila’s public debt left by his predecessor as the party’s national president, Humberto Moreira. Despite being the PRI’s national president for less than a year, Joaquín Coldwell performed according to expectations, in a swift, intelligent way, managing to handle the transition from one of the worst recent moments of the party – Moreira’s issue in Coahuila – to one of the best moments, with the return of PRI to presidential office.
Pedro Joaquín Coldwell was born on August 5, 1950, in Cozumel, Quintana Roo. He is the first son of businessman Nassim Joaquín Ibarra and Margarita Coldwell. From his early years, Joaquín Coldwell was very interested in politics, which was eventually inherited by his sister, Addy Joaquín Coldwell – Congresswoman, Senator, and gubernatorial candidate. He studied Law at Universidad Iberoamericana, afterwards returning to his home in Quinana Roo, and beginning a career in politics..
When he was 25 years old, he had already been elected Congressman for his native Quintana Roo. He ascended quickly, and, after abandoning the position in 1978, worked as Secretary General for Governor Jesús Martínez Ross. He was named Congressman for the Federal Congress, and, two years later, in 1981, he became Governor of Quintana Roo at only 31 years of age, capturing 96% of the vote.
During Carlos Salinas de Gortari’s presidential term, Joaquín Coldwell was named Director General of Fonatur (National Fund of Tourism Promotion). A year later, he became Minister of Tourism, once again showing his quick ability to advance through the nation’s political hierarchy.
After abandoning his position in 1993, Joaquín Coldwell became regional coordinator for federal elections in Baja California, Chihuahua, and Guanajuato. His reputation within PRI even made him one of the alternatives choices for presidential candidate, after the tragic death of Luis Donaldo Colosio; however the opportunity was given to Ernesto Zedillo Ponce de León, who later became the new president.
His political career moved on, being named PRI’s Secretary General, Peace Commissioner for Chiapas, and Mexico’s Ambassador to Cuba, from 1995 to 2000.
With the shift in political power, and the arrival of PAN to the presidential seat, Joaquín Coldwell put his efforts into personal business, to later return to politics in 2006 as a Senate candidate. After winning the election, he performed as a Senator for the Congress, where he was president of the Constitutional Issues Commission, secretary of the State Reform Commission, and member of the Justice and Tourism commissions. His term in the Senate lasted until 2011, when he was elected to succeed Humberto Moreira as PRI’s national president.
Even if he doesn’t have any experience in the energy sector, Pedro Joaquín Coldwell has been involved in discussing several issues on the Constitution and the State Reform. This previous experience makes him a great candidate to execute the structural changes needed for the energy policy in Mexico, and oversee the way Pemex, the national oil company, is regulated. The capabilities of ex-Senator Joaquín Coldwell will be submitted to the people’s judgment in an almost immediate way, with the new president’s promise to deliver his energy reform proposal during the first semester of 2013.
Pemex CEO: Emilio Lozoya Austin
After being named Young Global Leader by the World Economic Forum (WEF) in 2012, Emilio Lozoya Austin now has the chance to prove his capabilities as the new CEO of Pemex. The career of the young former Director for Latin America of the WEF has impressed new President Enrique Peña Nieto, who has now trusted in him to be the new Pemex CEO in a transition period for the Mexican energy sector.
Emilio Lozoya Austin was born on December 9th, 1974 in Mexico City. Son of Emilio Lozoya Thalmann, who was the former Director for ISSSTE and Minister of Energy during Carlos Salinas de Gortari’s government – and was also his classmate – Lozoya Austin comes from an extensive political lineage, that started with his grandfather, Jesús Lozoya Solís – military doctor and internal Governor for Chihuahua during 1955-56.
Lozoya Austin studied a Law degree at UNAM and an Economics degree at ITAM, where Pedro Aspe Armella, former Minister of Hacienda, was his teacher. Due to his good performance in the classroom, Aspe Armella decided to take Lozoya Austin under his wing, and helped him to emigrate, where he received the Masters Degree in Economic Development and Public Administration from the University of Harvard.
Through Aspe Armella, Lozoya Austin met Luis Videgaray – coordinator of Enrique Peña Nieto’s presidential campaign – who worked together with him in Protego. They would meet again later, when Videgaray took office as Minister of Finance for Peña Nieto’s term as Governor of Mexico State, and Lozoya Austin worked as Latin American Director for the WEF.
Lozoya Austin’s career is filled with impressive achievements for his age, which include being Analyst of International Reserves and Currency for Banco de México, Founder and Director of the social interest housing company, TerraDesign, and, finally, member of the Board of Directors of construction company OHL. In 2003, he started to collaborate in the Interamerican Corporation of Investments, before becoming the Latin American Director for the WEF. He is the founder of the investment fund JF Holding, with headquarters in Luxemburg, which grew from having a CAP of 50 million euros, to 1,200 million euros in just 13 months.
During Enrique Peña Nieto’s presidential campaign, he was the Coordinator of International Linkage, and in his transition team as Vice-coordinator of International Affairs, to finally receive the appointment as CEO of Pemex just a few days ago.
Once again, the Mexican Government has decided to choose an economist to occupy Pemex’s CEO position, after the good results obtained by Reyes-Heroles and Suárez Coppel. In this case, however, the approach is to inject a new mentality to the NOC with Emilio Lozoya Austin’s youth. Lozoya Austin’s supposed lack of age – compared to former Pemex CEOs – is balanced out with a career filled of personal and professional success. The fresh mind of a CEO that could reflect a modern way of thinking could help Pemex to turn into a corporation, rather than being the State “branch” that it appears to be. The capabilities of the young economist will be judged in the next few months, when new President Enrique Peña Nieto’s energy reform proposal is submitted to Congress approval.
 Data from the World Economic Forum