Steven Otillar Looks at Mexico’s Energy Reform with MCC
The Metropolitan Corporate Counsel has published “The Future Of Mexico’s Energy Industry,” an interview with Akin Gump energy partner Steven Otillar. Otillar, whose practice focuses on the development, finance, acquisition and divestiture of energy projects with an emphasis on upstream projects in emerging markets, discussed a number of topic related to Mexico’s energy outlook and recent reforms, among them:
- The impact of Mexico’s reforms: “The 2013 Constitutional reforms will give Mexico the tools to generate global competition for oil and gas exploration and production rights, similar to what we see on the U.S. side. The changes are truly transformational, as Pemex [Petróleos Mexicanos] itself now will be tasked with becoming a productive enterprise. Virtually everything is going to change in the energy sector in Mexico in the medium term.”
- The road to reform: “Amending the Constitution has been an absolute revolution, one that many colleagues thought would never happen. My own view was that amendments to the Constitution to end protection of ejidos (that is, communal agrarian land ownership) in 1991 set the stage for changes to the other pillar of the Mexican Revolution: oil and gas.”
- Interest in Mexico’s new energy market: “We have clients and are aware of many international companies that are extremely interested in participating. Some companies have maintained offices in Mexico for years waiting for this day. Almost everyone, from local Mexican companies to well-known NOCs like Statoil, to all the majors and major independents, is anxious to work in Mexico.”
- New opportunities: “The existing legislation authorizes several forms of model agreements, including production-sharing contracts, licenses, risk service agreements and profit-sharing contracts. Concessions are not allowed, and that’s an interesting legal point because of the similarities between licenses and concessions in the upstream space.”
To read the full article, please click here.