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Analysis

Engaging Communities in ISC Fields

Wed, 01/22/2014 - 10:58

A report released by the Federal Superior Auditor (ASF) in February 2014 pointed out a series of irregularities in the contracting processes of several ISCs. Chief among these cases was one pertaining to the Carrizo field, located in the immediate outskirts of Villahermosa in the South Region. This field was offered during the first round of ISCs in 2011 and the contract was won by Schlumberger, but according to the ASF report, work in the region has not yet begun due to issues of social engagement that preceded the contracting process. The report concludes that the field should not have been offered as part of these bidding rounds since the social issues in question had not been resolved.

It is true that limiting engagement with local communities over years of upstream activity in a given area involves a certain degree of risk. This particularly applies to onshore production areas in the South Region given the fact that certain communities can control, condition, or even block access to oil and gas worksites near their towns or villages if they are not satisfied with the way PEMEX engaged with or treated them. Such is the case of the Carrizo field, as despite several attempts to negotiate with the community stretching back to 1978, the families involved have refused PEMEX’s offers to buy their land. “The case of Carrizo is an example of the need for PEMEX and other operators to adopt a new and more professional approach to social engagement and management in certain mature fields in order to facilitate the entry of new operators,” says Jaime Martínez Mondragón, Director of Business Development of ERM, a leading international sustainability and social management consulting firm. He remains skeptical that PEMEX understands the full breadth of the challenges at hand, given its privileged position to date. “What would happen if Petrofac and not PEMEX was involved in some of the oil spills and well fires we are seeing in the South Region? They would never be allowed to get away with what PEMEX has been doing.” The importance of social management will only increase with time, especially since it parallels the further spread of digital technology and internet access throughout Mexican territory. Roberto Frau, Social and Sustainability Team Leader of ERM points out the role that technology has played in empowering local communities to demand accountability. “The biggest shift in the practice of social engagement and management in the last ten years is the fact that extremely remote places with extremely vulnerable and marginalized communities are no longer invisible,” says Frau.