Handling Land Negotiations for Drilling RightsWed, 01/21/2015 - 17:20
Q: How did Reymar start consulting for the oil and gas sector and what are the main legal issues it deals with?
A: Reymar was born in 2011 out of a concern to solve legal issues regarding the construction of infrastructure and the drilling of wells, mainly in the north of Mexico. Land tenure in Mexico is extremely complicated, so foreign companies need assistance in arranging ownership permits for the land on which they are drilling. The legalization of land is sometimes prevented because the parties involved in the transactions do not receive the right legal assistance, and no-one is telling them what is really at stake. Reymar aims to do precisely that. Our Director José Ángel Reyna held several senior positions in PEMEX, so he knows the company from the inside. In discussing this matter with other people involved in the industry, he realized the opportunity that lay in attending the legal needs of PEMEX and private oil and gas companies alike. Companies can then focus on their industrial projects while we take charge of the legal ramifications. We are currently working with Repsol and Tecpetrol in Campo Mision near Reynosa. We are also handling the legal aspects of a very ambitious project that Schlumberger developed in Cuenca de Burgos. This involved the drilling of around 400 wells and the building of three gas pipelines. Even so, while Reymar’s activities focus primarily on legal consulting, the company also undertakes construction work.
Q: How is the financial compensation package for a property determined and how does Reymar get involved in this process?
A: The compensation is determined through the National Institute for the Administration and Appraisal of National Assets (INDAABIN). INDAABIN is part of the Ministry of Finance and Public Credit, which manages Mexico’s national possessions and determines the price per square meter of land for which the payment is being made. Reymar’s involvement begins by elaborating a map of the property. Based on this detailed outline, we can define how many square meters are really being affected and what the corresponding price should be. We then request an appraisal from INDAABIN, which sends its experts to carry out their appraisal. Once this is finalized, we prepare a contract and ask PEMEX for its legal approval. After PEMEX looks over the contract and ensures its validity, the public notary has it validated. Following the signature of the documents and the completion of the payment, the contract is effectively enrolled in the property’s public record.
Q: How does Reymar manage to stay up to date on regulations at this time of change?
A: We have teams that are focusing on local laws and finding out how to successfully tackle local issues in the areas where we wish to work. Our legal department is undergoing constant training, and our agents are being certified to act as mediators between the landowners and operators or drilling companies. In our experience, many problems that lead to projects being shut down have to do with a lack of information and orientation. Reymar’s core duty is to shed light on the correct regulations and prevent such derailments. We are still concentrating on the area around Reynosa but we are also expanding to Villahermosa, where we are providing consulting services for Halliburton. Additionally, we are trying to work with Petrofac, but our competitors are hot on its trail as well.
Q: How do you compliment the legal consultancy with the construction of civil works?
A: The process is not as simple as approaching the owner, paying them the appropriate amount, and entering the property. We also help to build the roads leading to the drilling area and install the control panels, making it easier for our clients to come and drill. This is done through Reymar’s own construction arm and through alliances with other construction arms.
Q: What are Reymar’s other areas of activity in the oil and gas sector?
A: We are aware that PEMEX has to deal with fuel theft. Reymar wants to respond to the problem of fuel theft by launching a transportation enterprise. We are already hammering out alliances with American companies to offer PEMEX better transportation solutions. This would include transporting the product to the US, which could be done by train. From a general perspective, our challenge is to be constantly up to date with the latest developments so that we may offer PEMEX and private companies the best legal services. Ultimately, we want Mexico to be attractive to foreign companies.