Steven Otillar Quoted in Daily Oil Bulletin on Investment Potential in Mexico
Akin Gump oil and gas partner Steven Otillar has been quoted in the Daily Oil Bulletin article “Mexico’s State-Owned Midstream, Power Companies Offer Investment Potential,” which discusses the expected opportunities for midstream energy and power companies in Mexico in the next few years.
Otiller notes that by the end of the year, he expects to see several partnerships with private sector companies and both Petroleos Mexicanos (Pemex), the Mexican state energy company, and Comisión Federal de Electricidad (CFE), the state-owned utility.
To help finance many of the new midstream assets that will be sold by Pemex and CFE, as well as new infrastructure, Otillar thinks Mexico will start using a new instrument patterned after master limited partnerships. Those new entities, called “Fibra E,” are based on existing real estate trusts that operate in the country, called Fibras, and, the article reports, have been used to raise more than $11 billion in Mexico since 2011.
Otillar believes the midstream opportunities in Mexico are some of the best in the world, involving pipeline investment, storage of energy, compressors, processing and gathering and treatment of products with Pemex possessing a significant asset base. Additionally, with virtually all of Mexico’s upstream, midstream and downstream assets likely to be made available, along with power generation, he said there is probably nothing to compare to the opportunities for the private sector anywhere in the world. Further, the transparent approach being taken by the Mexican government, with the oil and gas auctions being broadcast live on the Internet and open bidding for other assets, Otillar said, does not exist elsewhere. He also thinks that in addition to the Fibra E model, there will be many approaches investors can use to tap those opportunities.