Do you think Mexico is still an attractive region to do business in? Why?/ What makes Mexico an attractive region to do business in during 2019?
I believe Mexico continues to be a good option to invest in 2019. Despite the uncertainty related to the installation of a new administration, the needs, and hence the opportunities across the value chain remain (geological potential, infrastructure, specialized services, etc.). It will be interesting to see how the government unfolds its agenda around the Energy Reform, which clearly has been a controversial topic. In my opinion there should be more focus in the E&P space to accelerate activity and lock incremental income from new players and royalties for the government.
What are the strategic priorities for the next 12 months?
In my opinion, there are 4 key elements that will define the structure of the O&G industry this year:
- Pemex’s rescue plan
- Farm-outs/ ins between private companies and Pemex
- Evolution of Energy policy and regulatory entities
- Application of Rule of Law in the country
In your opinion, what will the industry’s best-performing companies of tomorrow look like?
The ones that are flexible and agile in their decision making processes, and insert technology as a priority in their core business and top management’s agenda. The top performers should be able to combine local expertise with global best practices to capture value in Mexico’s new energy ecosystem.
Why is risk management so important in Mexico right now?
The Energy industry in Mexico is changing. Companies operating in the E&P space will face a new set of challenges as they implement their business plans; their exposure to significant losses will be much higher as physical activity increases. Therefore, it is of critical importance for companies to have an integrated view on their risk management capabilities, including risk mapping, prevention measures, insurance programmes, emergency response systems.
What type of risk is most prominent in Mexico?
In terms of operational risks in the E&P industry, there are minimum three prominent risks that operators need to address: well blow-outs, physical damage to own assets and potential impact to 3rd party entities (i.e. assets and staff). In certain plays, there is also a big exposure to environmental impact. In other parts of the value chain HC theft is more critical (thanks to the “huachicoleros”). Cyber-crime and political decisions are emerging risks that are important to understand and mitigate.
What is the biggest misconception new companies have when entering Mexico (in regards to risk)?
Probably that local “risk management” is a support function that focuses in meeting contractual clauses and regulatory requirements, instead of a key function that should be aligned to global “risk management” practices and focused in avoiding accidents and securing business continuity in case of a loss.
What is the best career advice you have ever received?
To get out of my comfort zone, and ironically, to take professional risks – measure twice, cut once.