SYS-CON MEDIA Authors: PagerDuty Blog, Michael Jannery, Pat Romanski, Elizabeth White, Liz McMillan

News Feed Item

Former U.S. Ambassador to Mexico Offers Perspective on Broader Impact of Mexico's Landmark Energy Reforms

Opinion: Mexico's Energy Reform Enters New Stage

AUSTIN, TX--(Marketwired - August 11, 2014) - With final Congressional approvals now in place, Mexico and President Enrique Peña Nieto can begin celebrating the passage of the secondary legislation necessary to codify last year's constitutional amendments that opened the energy sector to private investment. The confetti will have barely hit the floor when the focus must necessarily turn to the crucial implementation period when the institutional and market architecture must go from blueprints to the hard work of build out.

The December 2013 constitutional reform ended the monopoly of the state-owned energy company Pemex and introduced private investment into every segment of Mexico's hydrocarbon sector. It also gave regulatory authority to a new set of autonomous, independently funded entities that will oversee licensing, safety, and environmental protection. Additionally, the reform required that Pemex be transformed into a "state productive enterprise" and established the Mexican Petroleum Fund, under the purview of the Central Bank, to manage contract payments and oil revenue. 

There are uncertainties about how Mexico's new energy model will function when fully implemented, but they appear to be within the norms of other energy sector openings and entirely normal for this type of major reform. And, as others have noted, Mexico derived a bonus from the timing of its overhaul in the form of 'lessons learned' and 'best practices.'

The secondary legislation enables the constitutional reforms and serves as the basis on which business and investment decisions will be made. The recently approved package of bills included some 21 legislative changes that detail the fiscal regime, including the contract terms for private-sector upstream participation, as well as the responsibilities of the regulatory entities and new transparency and anti-corruption measures that will govern the sector.

Though the legislation has finally passed after several marathon sessions does not erase every doubt and eliminate every uncertainty, reaction has been largely favorable. Energy analysts have termed the legislation "fairly pro-market" and worries articulated early on in the process -- notably about whether private parties would be able to book oil reserves or the expected revenue streams from them for financial reporting purposes -- appear to have been satisfactorily addressed.

In fact, observers have been nearly unanimous in commending the government for its thorough preparation and commitment to following best international practices. They also have made note of the strong pro-market attitude and stance of government officials and a demonstrable commitment to the investor community.

One aspect of the secondary legislation of particular interest internationally is the provision relating to national content requirements. The legislation specifies a 25 percent national content minimum for incoming companies by 2015, which will increase to 35 percent by 2025. Analysts note the requirements are very competitive with those specified by other countries and have commented that they are a "non-issue."

Texans, in particular, appreciate what it takes to build a vibrant energy sector and know that it requires much more than legislation. The sector's architecture and the infrastructure that allow it to function are fundamental, and Mexico has done well in meeting expectations in these areas thus far. But each stage of the transition is important, and as the proximate period entails a central role for Pemex, both as the primary domestic operator and as a potential transitional partner, some are voicing concerns. Quashing these doubts is a tall order for the company, which is not known as nimble or efficient and which must overcome perceptions of corruption, demonstrate its commitment to transparency, and rapidly move to a new rule-driven, competitive reality. 

The energy opening has been termed "Mexico's second revolution." While some may view the statement as an exaggeration, few would dispute that the reform will be transformational for the country. Given Mexico's immense existing and potential resource wealth, and its other favorable attributes (stable democracy, solid macroeconomic fundamentals, global economic integration, geographic proximity to the US, to name a few), the energy reform should attract international interest appropriate to the unique and unusual opportunity it presents. For those involved in a booming energy sector, the extension of North America's energy renaissance is a good thing.

Antonio Garza is a former U.S. ambassador to Mexico. He is counsel in the Mexico City office of White & Case and chairman of Vianovo Ventures. Ambassador Garza is online at www.tonygarza.com and on Twitter, @aogarza.

The following files are available for download:

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Want to enable self-service provisioning of application environments in minutes that mirror production? Can you automatically provide rich data with code-level detail back to the developers when issues occur in production? In his session at DevOps Summit, David Tesar, Microsoft Technical Evangelist on Microsoft Azure and DevOps, will discuss how to accomplish this and more utilizing technologies such as Microsoft Azure, Visual Studio online, and Application Insights in this demo-heavy session.
Entuity®, a provider of enterprise-class network management solutions, today announced that it solidifies its position as a market leader through global enterprise customer acquisitions and a refined channel strategy. In 2014, Entuity increased new license revenues in EMEA by over 75 percent, and LATAM by over 125 percent as customers embraced Entuity for its highly automated solution and unified architecture. Entuity’s refined channel strategy focuses on even deeper strategic alignment with ke...
We are all here because we are sold on the transformative promise of The Cloud. But what good is all of this ephemeral, on-demand infrastructure if your usage doesn't actually improve the agility and speed of your business? How must Operations adapt in order to avoid stifling your Cloud initiative? In his session at DevOps Summit, Damon Edwards, co-founder and managing partner of the DTO Solutions, will highlight the successful organizational, process, and tooling patterns of high-performing c...
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.
“We help people build clusters, in the classical sense of the cluster. We help people put a full stack on top of every single one of those machines. We do the full bare metal install," explained Greg Bruno, Vice President of Engineering and co-founder of StackIQ, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
In this demo at 15th Cloud Expo, John Meza, Product Engineer at Esri, showed how Esri products hook into Hadoop cluster to allow you to do spatial analysis on the spatial data within your cluster, and he demonstrated rendering from a data center with ArcGIS Pro, a new product that has a brand new rendering engine.
"Blue Box has been around for 10-11 years, and last year we launched Blue Box Cloud. We like the term 'Private Cloud as a Service' because we think that embodies what we are launching as a product - it's a managed hosted private cloud," explained Giles Frith, Vice President of Customer Operations at Blue Box, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
SYS-CON Media announced that Splunk, a provider of the leading software platform for real-time Operational Intelligence, has launched an ad campaign on Big Data Journal. Splunk software and cloud services enable organizations to search, monitor, analyze and visualize machine-generated big data coming from websites, applications, servers, networks, sensors and mobile devices. The ads focus on delivering ROI - how improved uptime delivered $6M in annual ROI, improving customer operations by minin...
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
Puppet Labs on Wednesday released the DevOps Salary Report, based on salary data gathered from Puppet Labs' industry-recognized State of DevOps Report. The data confirms that market demand for DevOps skills is growing, and that DevOps engineers are among the highest paid IT practitioners today. That's because IT organizations today are grappling with how to be more agile and responsive to the business, while maintaining the stability of their infrastructure. DevOps practices, such as continuous ...
AppDynamics, the application intelligence leader for software-defined businesses, announced the general availability of the AppDynamics Fall '14 Release. Serving the combined needs of IT and business teams across the enterprise, the latest release provides a comprehensive view across all aspects of digital performance in ultra large scale deployments. AppDynamics delivers Application Intelligence by building out advanced capabilities across the key areas of analytics, unified monitoring and D...
CloudBees, Inc., has announced a $23.5 million financing round, led by longtime CloudBees investor Lightspeed Venture Partners. Existing investors Matrix Partners, Verizon Ventures and Blue Cloud Ventures also participated in the round. The latest funding announcement follows earlier rounds of $4 million, $10.5 million and $10.8 million, bringing the total investment in CloudBees to just under $50 million since the company’s inception in 2010. Previous venture investment rounds were led by Ma...