Q: How has the role of industry regulators changed with the arrival of a new government?

AS: There is continuity in the way processes have been managed by these public institutions throughout the change of administration. Transparency and the role of ASEA, CNH and SENER were particular success stories from the Energy Reform and have helped attract investment into Mexico.

Major companies and the largest investors are only interested in working in countries where the oil and gas industry complies with the highest standards and where rules are clear. This must be continued because without the help of the private sector, the administration’s production goal will be extremely difficult to achieve in the coming years.

CP: As a global sustainability company, Environmental Resources Management (ERM) works alongside clients in different regulatory situations but we always advise our clients to work with the highest international standards regardless of the country where they are working. This is one of ERM’s major values: showing our clients how to properly generate KPIs that can be shown to any government. Our global presence gives us the experience needed to support our clients as they enter into a new geography where novel risks and different regulatory frameworks are present.

Q: How do ERM’s services evolve as Mexico’s oil and gas industry moves from exploration toward production?

AS: ERM delivers services to its clients throughout the life cycle of their projects. We begin from the preinvestment phase, helping clients evaluate nontechnical risks associated with entering new countries, then onto permitting, operation and finally right to the abandonment of the project. We have advised our Mexican clients from exploration and are now helping as they move into production. Our teams know the life cycle of projects in the oil and gas and therefore offer expertise on industry standards and trends that few other consulting firms can match.

Q: What are the main obstacles for clients while working in the field?

AS: Our experience is that private companies are suffering from disconnection between the federal government level and the local or state governments. Energy Reform laws were made at the federal level, but problems are worked out in local circumstances, with local authorities. If there are problems at the local level, it is difficult for companies to push ahead. Their hands are often tied because they lack the legal instruments to move forward. This is an area of opportunity for legislators.

Q: How does ERM advise clients to build bridges with local communities?

AS: The idea of the good neighbor should be taken as the first step by companies hoping to build trust with communities. Companies that build connections with communities, also build protection from crime and other security issues. In Mexico, the situation can be extremely complicated, but a solid foundation of trust will help generate a good feeling toward the company. Sustainable investment programs that create opportunities for community members are one part of this. Another avenue is for operators to cooperate, both among themselves and with governments and local communities, to build regional investment programs that have a greater collective impact on the future of the areas they work in. But this kind of cooperation is not always easy.

CP: We have a social team in Mexico that is used to working on these relationships with communities. Also, in anticipation of the oil and gas industry’s production phase, we opened an office in Villahermosa to be closer to our clients and to have locals who know the area and the communities. This will help broker resolutions for any problems that arise.

Environmental Resources Management (ERM) is an international consultancy focused on environmental, social and health-risk assessments for projects in a number of industries. It is also highly experienced in advising oil and gas operators.