Electric Power is Shell’s Newest Mexican Ambition

In the past, Shell’s Mexican arm has said that the country occupies a vital position in its overall growth, which explains why the company is involved in all the main processes of the oil industry: exploration and extraction of hydrocarbons as well as gasoline and natural gas distribution. However, the company has now announced that it plans to take the step to start selling electricity, among other sustainable initiatives in its transition toward net-zero operations.

Alberto de la Fuente, President and Managing Director, Shell Mexico, emphasized Mexico is important because of its massive electricity demand and its abundant resources to fuel the energy supply. De la Fuente asserted that the company has 10 oil wells in the process of exploration, of which nine are deepwater and one in shallow water.

“We would also like to be in the business of selling electric power at some point, depending on how the regulatory framework turns out, but we are present in every [market] segment to satisfy the demand … The main goal is to have more products on the supply side,” said de la Fuente in an interview with Banorte.

Even though de la Fuente has reassured the press that Shell’s commitment to the Mexican market is strong, he also expressed fear over the possible consequences of the rising global inflation. If crude oil prices increase too quickly for extended periods of time, then the demand may disappear.

Shell is one of many private energy companies that have faced restrictions to obtain permits from energy regulator CRE. Accordingly, its management has made clear that the company’s vision is set for the long-term. Lucía Bustamante, Director of Corporative Affairs, Shell Mexico told El Sol de México that the company is looking up to 50 years into the future, so the prospect of negotiating with following administrations is always considered. Nevertheless, Bustamante hopes that the public energy sector of the future is more aware of the importance of looking at the state of the country, so that the state looks “toward 2050, rather than just toward 2025”.

Moreover, Shell has recently started to try to shift investment away from its oil and gas projects in order to reach a net-zero level of carbon emissions. The company has also revealed its intentions to promote projects such as sustainable mobility, for example through catering to electric vehicles. The project is expected to start in Puebla and will eventually reach the rest of the country following this pilot. As Bustamante pointed out: taking part in the energy industry means proceeding with the clean energy transition.