Global Experts Keep Working Through UncertaintyWed, 01/18/2017 - 13:20
Since the Energy Reform transformed the country’s hydrocarbon sector in 2013, regulators, lawyers and consultants have been collaborating to formulate a new oil and gas regulatory and legal framework for the country. Backed by 35 years of experience helping PEMEX standardize its own regulation, global regulatory evaluation company Bureau Veritas is not afraid to get more deeply involved in the task but has had trouble making its voice heard with safety regulator ASEA. “The way of working today is much more through written comments and no direct contact,” says Rafael Parrilha, Country Chief Executive of Bureau Veritas. “I believe more could be done with conversations.”
Putting it down to ASEA’s concern with transparency, Parrilhas says Mexico’s safety and environment regulator has devised a new model of requesting written comments and feedback but in his eyes more could be achieved through direct, hands-on discussions. ASEA has pumped out new regulations at an unprecedented rate since its inception two years ago, including the pivotal deepwater regulations released in the run-up to Round 1.4.
“ASEA is new so companies are still trying to negotiate the new ways of doing things,” says Parrilha. “Now we have gathered a lot of knowledge on how we can work with these agencies.” Indeed, according to the Country Manager, a main area of doubt is whether agencies like ASEA and CNH will be willing to receive guidance from international companies when working on farm-outs, given their centrality to the eventual success of the Energy Reform. “We also need to wait to see how flexible PEMEX will be in accepting international standards,” he says
With 1,400 offices and laboratories spread across 140 countries, 66,000 employees and over 35 years’ experience directly helping PEMEX with its regulations, Bureau Veritas has the credentials to be of great help to Mexico’s regulators in their endeavor to create robust, industry-friendly regulations, Parrilha believes. By helping develop the best structure of standards and regulations depending on each client, Bureau Veritas looks to preserve the environment and encourage safety while being flexible toward promoting business, he adds.
And it certainly would not be the first time his company has done this in Mexico. As well as helping standardize PEMEX’s regulations and auditing some of its assets to evaluate compliance, Veritas won a contract with the NOC in 2011 to establish a normative structure for deepwater ventures. “PEMEX is still evaluating how this will progress but we submitted a proposal based on our international experience,” Parrilha says. “We proposed the standards we believe to be the safest while remaining practical.”
PEMEX is prepared for the challenge of adopting international standards in its farm-outs because it has had time to study models in other countries, both successful and unsuccessful, he says. This shows in the way that the Mexican company wants to learn from investors and even use them as technical advisers.
All in all, Parrilha believes that Mexico remains a stable country for investment in oil and gas. “The main concerns companies have are in terms of regulations and politics,” he says. “With the change of party in the last election, there was little impact on the macro economy, suggesting a great deal of stability.” In 2017, he says, the landscape will remain difficult but the industry will begin to see an improvement due to the difficult decisions already made by PEMEX. “I want to see the results of the farm-outs, partnerships and JVs,” he says. “I hope that in the short term this will compensate for the crisis PEMEX experienced.”