Latinvex Quotes Dino Barajas on Energy Investment Opportunities in Mexico

Akin Gump cross-border transactions partner Dino Barajas has been quoted in the Latinvex article “Mexico Energy: Investors Hesitate Over AMLO.” The article reports on the wait-and-see approach taken by investors with regard to Mexico’s energy sector, in light of the policies of new President Andres Manuel Lopez Obrador (AMLO).

According to the article, Mr. Lopez Obrador, who took office in December, has pledged to adhere to nationalist energy policies—a clear break from his predecessor who opened up Mexico’s energy sector through a historic reform. While he plans to build a new $8 billion refinery to boost state oil company Pemex’s production, he has also suspended all new oil auctions for the next three years and publicly threatened to revise contracts that the state electricity company has.

Barajas, however, sees Mexico as providing new opportunities as well. The energy sector “will be one of the most interesting and opportunistic investment environments in all of Latin America,” he said. “AMLO’s decision to take a fresh look at the last administration’s energy reforms will provide investors which were late to the last development boom a new opportunity to evaluate the developing market and look for niche opportunities to enter the market. The near-term market may appear chaotic as new policies are being evaluated, but there are actually many opportunities presenting themselves if investors and their advisors know where to look.”

Overall, Barajas thinks Latin America will continue to remain one of the best long-term energy investment and development markets for long-term players.

“The determining factor in the success or failure of any investment will be how well a particular project is structured,” Barajas said. “Having advisors with multi-jurisdictional experience and a historical perspective on the market in question is crucial. A number of the Latin American markets on the forefront of attracting a new wave of foreign investments having actually gone through various development cycles during the last 25 years. Understanding the factors underlying those cycles will be critical in structuring successful project in the present-day investment environment.”