Emilio Lozoya Austin
View from the Top

Future Ambitions for Pemex

Tue, 01/22/2013 - 10:43

Q: What are your priorities for 2013?

A: Our priority is to increase investment in the exploration and production of hydrocarbons. This year we will be allocating around US$18 billion to exploration and production, which will allow us to increase oil production for the first time since 2004.

Q: Mexico has a significant trade deficit in refined products; what are the most feasible solutions to increase Pemex’s refining capacity, either in Mexico or through international refining investments?

A: We have designed a series of very important projects for Pemex Refining, and we will be investing around US$20 billion over a number of years to increase the production of refined products, while making both the refining process and refined products more environmentally friendly. One of these projects is the construction of the new refinery in Tula, Hidalgo, which together with the existing refineries will comprise the largest refining complex in the world.

Q: What are Pemex’s ambitions to internationalize its upstream activities and gain experience, expertise and access to new technology through E&P operations outside of Mexico?

A: For Pemex it is essential to incorporate new technologies and develop its human capital. To achieve this, we must strengthen our cooperation agreements with universities and research institutes in the United States and Europe, in addition to the technological cooperation agreements we already have in place with international oil companies. These types of agreements allow us to advance the acquisition of technology and knowledge to better align our ways of working with international best practices. In the past Pemex has participated in exploration and production projects abroad, and I think that we should not discard the possibility of Pemex, once again, starting to work outside of Mexico.

Q: What would be the main elements of an optimal energy reform from the Pemex perspective?

A: We need a more adequate regulatory framework, and a legal framework that allows a larger participation of private investment, as well as a new fiscal regime that allows Pemex to pay a more appropriate tax rate that leaves the company with the necessary financial resources to invest, operate in a flexible manner, and develop more sustainable projects. The legal framework must give Pemex the budgetary and management autonomy that allows the company to make the right investment decision at the right moment, and allows us to enter into partnerships with companies that we find most convenient, without risking Mexico’s ownership over its hydrocarbons.

Q: In order to claim success at the end of your period as Pemex’s CEO, which indicators concerning the company’s performance should be prioritized and why?

A: President Enrique Peña Nieto’s administration is committed to a series of reforms of which the energy reform is one of the most important components. This reform is focused on transforming Pemex into a company that maximizes the value of the country’s hydrocarbon resources for the benefit of all Mexicans, and be an engine of Mexico’s economic growth. If we achieve this goal, we will have fulfilled our mission.