Octavio Lievano
Country Head
Crédit Agricole
View from the Top

Financing Private Participation

Tue, 01/21/2020 - 17:49

Q: Where along the value chain is Crédit Agricole most active?

A: While Crédit Agricole has been active across the oil and gas value chain in many areas, we have not yet ticked all the boxes in Mexico. PEMEX is an important client for us and we have deployed significant financinge to support it. We have upstream capabilities in areas like shipping finance and petrochemicals. Our prominent midstream position can be seen in our Los Ramones involvement. Midstream continues to be a very attractive play for us and we have a lot of money at stake in the country. The bank is less active in downstream but we do have expertise there and have previously considered financing downstream. We will continue to consider downstream opportunities that may arise.

Q: How do you decide on the financial tools you employ for Mexican clients?

A: We look at the needs of the client and then apply the most effective tool for that need. Crédit Agricole has provided direct syndicated loans and hedges to PEMEX and a couple of years ago we worked on a US$1 billion loan and bond with KKR for PEMEX. In 2017, the bank also placed the largest ever EM euro-denominated bond in the world for PEMEX. We also worked on the world’s first ever Ex-Im bond for a corporate, also with PEMEX. The Ex-Im bond is well-suited to investment. Much of our oil and gas financing in Mexico is provided through equity or service lending so our influence is less immediate.

Q: Has Mexico’s improved regulatory framework helped make the country more attractive?

A: Certainly. Records have been set at energy auctions and oil and gas has seen many players bidding aggressively for fields, projects and constructions. This is a testament to the attractiveness of the country’s framework and its market prospects. Ultimately, we are here to support investment and growth. Oil and gas investment can take time so we will only see the benefits of the regulation on investment in the coming years. First oil in deepwater can take seven years so we must wait and see.

Q: What does Crédit Agricole’s international experience bring to Mexican financing?

A: Many of the banks in Mexico are global, including Santander, HSBC or BBVA. Some Mexican blue chips have subsidiaries abroad so our global presence can help attract business here. While some international banks have a strong local presence and a large funding base in Mexican pesos, we tend not to work in peso-denominated financing. Instead, we look at dollar projects. We are in the Top 5 of the global project finance field and we bring this know-how when structuring these projects. We offer creative financial solutions to our clients to help them achieve their goals.  

Q: How does Crédit Agricole view the PEMEX downgrades?

A: PEMEX has strong cash flow but is being taxed significantly. We think the government understands PEMEX needs some space to reinvest its cash and that it is taking the right measures. All players are watching PEMEX but we have a long-standing institutional relationship with the company and we are there to support our clients throughout business cycles and evolutions. Crédit Agricole is monitoring its progress carefully and are confident that the government will take the right steps. We are cautiously optimistic for the future.

Q: How will private investment shape oil and gas in Mexico and what part will Crédit Agricole play?

A: Mexico’s macroeconomic outlook and the country’s structural characteristics make it an interesting proposition for private investors. The midstream sector and retail market will see more private investment due to the liberalization of fuel prices at the pump. Other investment aspects are up in the air. We know that the new government has a different perspective on Mexico’s energy industry, particularly energy sovereignty. Constructing a refinery is one manifestation of this change in attitude. This means we will have to wait and see but Crédit Agricole is searching out opportunities to remain involved in Mexico’s future.


Crédit Agricole is the world’s largest cooperative financial institution. The firm has been present in Mexico since 1970, providing, among other services, investment banking, structured financing and loans for major clients including PEMEX.