Steven Otillar, Eduardo Canales Article on Mexico Energy Industry Published by PFI
“Optimism South of the Border,” an article by Akin Gump oil and gas partner Steven Otillar and associate Eduardo Canales, has been published by Project Finance International. The article discusses how, in the wake of a tumultuous 2015 that saw the abolition of Pemex’s monopoly on oil and gas development as well as the creation of new government agencies to regulate this newly opened energy space, there is reason for optimism in Mexico’s near-term energy future.
The authors trace developments as Mexico completed three phases of the first round of oil and gas block auctions, analyzing what happened in the country’s upstream and midstream oil and gas industry.
They then look ahead to 2016 and the Fourth Tender, which would include, inter alia, deep and ultra-deep-water blocks, as well as at the impact on the midstream sector of the Mexican government’s reforms.
The authors conclude by noting that, despite recent declines in oil prices, “[L]ong term trends still show positive growth in demand in the coming years. Developments in Mexico occurring now will not only help Mexico satisfy its substantial demands, but should allow it to be a net energy exporter.” Looking at the Fourth Tender, they write that, “[It] will focus on unconventional resources. This vast potential has yet to be tapped, and could provide a similar increase in production to what has occurred in the US.” The article closes with the authors’ assertion that “we can expect to see a surge in project development and finance in the midstream and power sectors, continued growth in wind and solar projects, and the expansion of Mexico as an energy hub in Latin America.”
To read the full article, please click here.