History will remember 2013 as one of the most important years
for the Mexican energy sector. The oil and gas industry has
been a cornerstone of Mexican history and tradition, and has
played a fundamental role in the development of our economy.
Parting Shot: A new beginning
Mexico’s energy reform opens the way for Pemex to
modernize its capital structure and improve its financial position, writes its chief executive Emilio Lozoya
Today, Pemex is the biggest and most important corporation
in Mexico. We truly represent fuel to the Mexican economy. We
are among the top five crude oil producers worldwide and we are
one of the top three exporters of crude oil to the United
Yet, Pemex and the Mexican oil and gas sector - reflecting a
global industry trend - are at a crossroads. The need for
additional access to technology, know-how and financial
resources, as well as the increasing energy requirements of
Mexico's evolving economy, has called for a thorough analysis
of our sector and of our business model and the implementation
of a new approach, as well as the adoption of a new mindset.
President Enrique Peña Nieto has a clear understanding
of these circumstances. Since his presidential campaign he has
been determined to lay aside paradigms and prejudices, to
embark on what will be one of the most influential events of
modern Mexican history.
Allowing Pemex to work more like a corporation and less like
a government agency will set the path to unleash our potential.
More than before, we will be able to take full advantage of our
human capital, of the technology that we have developed in the
fields where we have advanced expertise, and to share it in
exchange for the expertise and know-how in new productive
frontiers, like deep waters and shale formations. Important
challenges lay ahead of us, and in a more competitive
environment Pemex will have to transform itself.
We will introduce a new more dynamic and efficient corporate
structure, regrouping our four subsidiary entities into two,
split between upstream and downstream, which will make
decision-making more streamlined and timely. We will modernize
corporate programs and business models which, in some cases,
have not been revised since the establishment of the company
back in 1938. And, also, we will engage in an arm's length
relationship with the federal government, which will grant
additional capacities to Pemex with, of course, a higher
commitment to transparency, accountability and stronger
corporate governance policies and practices.
We will continue to look for the best ways to deploy our
resources and optimize our capital base, including examining
new financing strategies for our non-core businesses. Upstream
activities, in the regions where we have most expertise and
which offer a significant competitive advantage to Pemex, will
continue to be the main focus for our investment. However, the
reform provides Pemex the means to overhaul and improve the
economics all along the entire value chain.
With this transition, Pemex will remain the leading company
in Mexico, with greater access to technology, and will embark
on a gradual course to a much more solid financial position.
The Mexican oil and gas sector will eventually grow in
importance and undoubtedly become an even more important driver
of the Mexican economy than it has been up to now. Its growth
and evolution will represent progress for Mexico, because of
additional investment, infrastructure, job creation and a
gradual increase in production of petroleum derivatives and
feedstock to generate more energy at competitive prices.
The energy reform gives Mexico the opportunity to reach a
strategic position in the North American energy market and take
full advantage of Mexico's vast resources to the benefit of its
citizens. At the same time, Pemex now has the opportunity to
participate in an open market, to compete and to collaborate
with other operators. I trust we have a solid foundation to
build upon and openly measure our performance against the best
companies in the sector. We have the means and we will have the
tools to become a better company and stronger source of wealth
and prosperity for our country. LF
Emilio Lozoya is chief executive of Pemex