Raymundo Platas Merino
View from the Top

Fostering Oil and Gas Links Across the Americas

Wed, 01/20/2016 - 11:17

Q: Which activities and goals distinguish your organization from others on the market performing similar functions?

A: We were founded three years ago and today we have 480 members. The distinguishing feature of LAOGA is our focus on the supply chain, as well as compliance and certification for the major players coming to the Mexican market. The second most important point of the association is our participation with the different committees involving entities such as CNH, ASEA, CENACE, CENAGAS, and CRE. We form a voice for the industry in order to provide access to the regulations and relevant information that will facilitate these companies’ establishment in Mexico. We partner with a variety of organizations like COPARMEX, CANACINTRA, and CONCAMIN, as well as the Chamber of Commerce in order to optimize processes for economics, supply chain, and political input areas. Our main focus is working to create relationships with the Secretariats of Energy in each state to effectively represent the different energy players within the sectors. The main goal of LAOGA is to have members conducting business through the association.

Q: What is your perception of the national content requirement, and what are the main challenges being faced in this area?

A: Firstly, I believe this requirement is necessary in order to guarantee effective technology transfer in Mexico. In the past, PEMEX’s monopoly has meant that technology was not a main priority in Mexico, but with the opening of the market, this has gained a greater importance. In terms of the local companies within our organization, this represents a promising transition for them. Many of the foreign companies coming to LAOGA seeking facilitation in terms of setting up operations in Mexico want information on the intricacies of the new contracts. Regardless of this percentage or the joint venture structure, many of the foreign companies that we have worked with have preferred to be allied with a local partner, at least initially, so this represents a significant opportunity for the local industry.

There are many questions regarding the process, and one of the main functions of LAOGA is to clarify the roles, duties, and requirements of the administration. It is therefore our duty to provide success stories and examples of the way in which the benefits of the reform can be seen. These examples will come in the form of those first tenders awarded in the first phases of Round One, and we will be working with the Offshore Committee to provide channels for dialogue with the Ministry of Economy in order to comply with those rules. We simultaneously have an opportunity to partner these companies with suppliers, which constitutes another joint venture opportunity for the local industry.

Q: How would you help entering companies identify a local supply chain?

A: First and foremost, we are extremely selective in terms of our members, and we will continue introducing new members to the association, while requiring full compliance with our policies and certifications. We work based on best global practices, especially for key accounts like operators, medium-sized companies, and service companies like Halliburton. We are also planning to launch an application called Procurement Energy Shop, which serves as a guide or directory. We register all our members in this application and compile their information, and through this service we are providing these details to the rest of the players in the market.

Q: In the current environment of uncertainty, what are the key milestones that you hope to surpass in 2016 as an association?

A: The goal is to welcome 1,000 members by the end of 2016, and we are sure we can achieve that, whether they are from Mexico or abroad. Secondly, we aim to generate at least US$2 billion in contracts for our members through the organization. Thirdly, we wish to achieve an active participation in each committee in terms of regulatory issues, and to be extremely active within each regulatory entity. The government has already fulfilled its responsibility in approving the Energy Reform, so it is now up to organizations like ours and the rest of the industry to participate in shaping the legislation and best practices. We have formed an alliance with the Texas Oil and Gas Association, and next year we will endeavor to create more links like these.