Law Advice Based on First-Hand ExperienceMon, 02/25/2019 - 12:51
Q: Why should companies in the Mexican electricity industry choose BGBG for legal advice?
A: BGBG has a practice area that is highly specialized in energy and infrastructure. Regarding electricity, we have not had as much activity as in the oil and gas sector but we still have expertise and knowledge in the matter. Our main focus is in generation and consumption projects. Recently, we started advising energy-producing companies that are in the process of negotiating energy-supply contracts and PPAs. We are also advising companies across the value chain so they can be more prepared when offering their services to energy producers. The main added value that differentiates us from others in the legal area is our experience. We know the sector from the inside and understand how it operates.
Q: In which project has BGBG’s services made a significant difference?
A: We participated on a project with a multinational electricity utility where the contact was made by the operational and technical area. The issue related to a topic of national content and this company had already reviewed the problem internally with its lawyers and other firms without success. We had experienced similar situations previously in our oil and gas division so we knew how to handle the situation.
Through our previous experience, we knew that PEMEX obtains resources from various Exim banks in exporting countries. These Exim banks promote foreign trade by funding projects where supplies are to be imported from the country where the bank is incorporated. For every credit given by the bank it is necessary to legally demonstrate that the capital is being used for importation from the bank’s country of origin. Every month, PEMEX asked us for a list with every purchase and import made, so we created an area in charge of that process. With this background, we were in the position to offer the multinational electricity utility training regarding formats and information generation at an engineer level with the objective of gathering purchase information from the suppliers and been able to deliver it as requested by the National Content regulations applicable to the client contract. As lawyers, it is essential to learn to speak the client’s language and make it as simple as possible.
Q: What main questions are being raised by your customers in the electricity industry?
A: The main concern customers have involving energy projects is land ownership and transfer of rights. In Mexico, land legislation is quite old and available information is often outdated or incomplete. Another common situation is royalty payment, as many land occupants are not the original or legal owners of the property. This is one of the biggest hurdles that players face while negotiating rights for pipelines, oil fields, transmission lines, wind and solar park projects. When we were advising on the rights of way for a PV plant transmission line, in the quotation I recommended my client involve specialists in this kind of permitting process. These may include topographers, appraisers, evaluators and project managers.
Our law firm does not have these professional services directly but as we understand the business and counterparts involved, we can provide references and recommendations of companies that provide these kinds of solutions and we have the ability to work with them in multidisciplinary teams which is a very important skill in the Energy and Infrastructure sectors.
Q: What is your long-term vision for BGBG in the Mexican electricity industry?
A: The main focus will be to attract bigger and more sophisticated clients. Also, we want to start establishing specialized working teams by practice area, as energy projects are diverse in terms of infrastructure. Of course, we want to expand our services to cover other projects, such as highways, hospitals and airports.