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Insight

The Final Piece of the Reform Puzzle

Wed, 02/24/2016 - 12:49

In the new energy arena, Severo López, Senior Partner at Galo Energy, quickly spotted the need to offer specialized consulting services with hands-on experience, which led to the company’s creation. “Galo is a consulting firm specialized in the power market, natural gas, and upstream oil segment. It brings together a qualified interdisciplinary team, with knowledge and experience in regulation, policy, and business development aspects of the industry,” López explains. This enables the firm to supervise projects from their inception all the way to their development. “Galo Energy is currently focused on taking on infrastructure projects from US$300 million up to US$1 billion,” he adds.

While some players relish the challenges that lay ahead, others fear missing important business opportunities. López has identified two major hurdles that must be surmounted for the smooth navigation of the budding energy industry. “First of all, the transfer of assets from PEMEX to CENAGAS must be transparent. This is a complex process in terms of human resources and assets, as well as from a legal and financial perspective. CENAGAS must develop the people and regulations required to succeed.” This will take time and, in Lopez’s view, its implementation will affect the full spectrum of the energy sector in Mexico.

A missing piece of the puzzle is how CENAGAS will cooperate with CFE, considering the latter is an important purchaser of natural gas in North America. López questions how CENAGAS will maintain a level playing field in a market with such a predominant player. Another factor that is often overlooked is the availability of capable human capital. “CENAGAS and all new institutions that are a product of the Energy Reform must create the necessary building blocks of knowledge and experience in its workforce,” López asserts. Galo Energy has deep insight into the thought process of the industry. “When analyzing the opportunities in Mexico, there are two major factors: uncertainty and big expectations.” When facing the enforcement of the Reform. Consultancy firms must amass politically shrewd teams that are knowledgeable in engineering, energy, and regulatory matters in order to prevent precious business opportunities from falling between the cracks of the energy landscape.