On October 3, Gulf Energy and Petroleum Economist hosted the Mexico Energy Strategy Forum 2018 directed to key players in the Mexican oil and gas industry eager to understand the best opportunities and challenges the market has to offer. During the event, both the Dutch Energy Association and Mexico Oil & Gas Review had the pleasure to take part as media partners and promote the country’s attractiveness for local and international investment.
The forum opened with Pedro Joaquín Coldwell, Minister of Energy, explaining the importance of strengthening the country’s oil and gas industry to create a robust industrial ecosystem. “Oil and gas impact on Mexicans’ way of living is associated to our national identity. Its production and utilization gave place to a singular popular culture in the areas where oil and gas activities are present across the country,” he said. The Minister then mentioned that the country has to strike a delicate balance between international expertise and fostering the local industry. “The objective of the Energy Reform was to invite private investment and cutting-edge technology developers along with the entire value chain of the industry while always safeguarding Mexico’s sovereignty and interests,” he said.
Joaquín Coldwell also explained how the changes made to the constitution and regulation created a new productive system, allowing collaborations between PEMEX and other operators through licensing rounds and farmouts. The Minister expects that the 107 contracts signed during the past licensing rounds will produce 250,000b/d of crude oil equivalent by 2023 and up to 740,000b/d of crude oil equivalent by 2030, which represent 27 percent of the country’s daily production today. Joaquín Coldwell also mentioned the advances in terms of pipelines and storage facilities for oil, gas and their respective derivatives. All this, he says, are the foundations for a strong energy sector. “The Energy Reform is a regulatory and institutional framework designed strategically to boost the productivity capabilities of the Mexican economy and energy industry, providing Mexicans with tangible tools to keep building a better energy future for Mexico,” he said.
After Coldwell’s keynote presentation, a series of panels we held addressing energy policy, upstream updates and opportunities ahead, transportation, distribution and storage infrastructure challenges and needs and tools to finance Mexico’s energy boom. This discussion took place between key players in the Mexican oil and gas industry such as Lourdes Melgar, Former Deputy Minister of Hydrocarbons and Electricity, Monica Bøe, Director General of Equinor Mexico, David Madero, Director General of CENAGAS, Fernando Tovar, CEO of Engie Mexico, Nansen Saleri, Chairman and CEO of Quantum Reservoir Impact and Vera de Brito de Gyarfas, Partner Corporate Finance and Investments at King & Spalding.
During the “What Lies Ahead for Energy Policy?” panel, Melgar explained the importance of continued investment in Mexico’s oil and gas exploration. “There is no oil company that can survive without working on exploration,” she said. She did not underestimate the importance of production, especially of natural gas, as the country is highly dependent to US production.
During the “Upstream Industry Update” panel, Loren Long, Vice President Mexico of Talos Energy shared information regarding the unitization process of the Zama field with PEMEX which, according to him, is an “historic agreement.” “There is no reason why we cannot share the key information with PEMEX or regulators,” he said. According to Long, this process will bring the best of both Talos Energy and PEMEX to help increase Mexico’s oil and gas production.
Meanwhile, David Madero, Director General of CENAGAS, shared the achievements of the institution he leads as an efficient natural gas transmission system operator that works under a unique mixed model where half of the time it is a technical manager while the other half is a natural gas transporter. “The transporter has the objective of being efficient, just as any other natural gas transport company in the world, with its first commitment being to security and then to reliability, working at the lowest cost possible to offer a return of investment to its shareholders, which in the case of CENAGAS is the Mexican people,” he said. He then continued by explaining the objective of the technical manager, who has the objective to provide the highest certainty of natural gas supply in the country as possible.
The event closed after a day filled with networking opportunities as important information but not before the “How will the Energy Boom be Financed” panel, in which Oscar Roldán, Head of the National Hydrocarbons Information Center, mentioned the importance of the legal framework built around the oil and gas contracts in Mexico to provide financing tools to operators.
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