Steve Otillar Quoted by Bloomberg on Mexican Energy Regulations, Joint Ventures and National Content Rules
Bloomberg BNA, for its article “Mexico Publishes Final Regulations To Open Energy Sector; Auction Set for 2015,” quoted Akin Gump oil and gas partner Steve Otillar on the impact of Mexico’s finalized energy regulations on companies’ future joint ventures (JVs) with national oil company Petróleos Mexicanos (Pemex), among other topics.
The article notes that the now-complete regulations, which will allow Pemex to establish joint venture arrangements with private companies, provide more specific information for the oil and gas sector on how the government’s arrangements with Pemex will be migrated into contracts, a key step for the establishment of these JVs. Otillar added, “Companies that want to have joint ventures with Pemex now have an exact road map of how to bring these potential ventures to fruition.”
The next step will be the issuance of oil and gas tenders, which will begin in November, the article notes. Otillar said that, in the interim, additional clarification on, among other topics, the new national content requirement is needed, noting:
“There is not a lot of detail on how they are going to implement the national content obligations stated in the reforms. It has been a highly political process in other countries—the Nigerian local content regulations, for example, were very extreme, and the Brazilian model has developed into a very complex system. I am really hoping to see if they have a more advanced plan of how to reach the stated national content goals in a way that will not discourage investment.”