Palma Méndez
Country Manager
Wood Mackenzie
/
Insight

Helping Mexico's Energy Industry to Get Stronger

Tue, 01/21/2020 - 16:20

The safe landing of investments in a country requires a proper regulatory framework that secures and encourages these investments. While the new López Obrador administration has yet to unveil its final policy framework, Palma Méndez, Country Manager of international research firm and consultancy Wood Mackenzie, says one thing is already clear. “Given that the new administration’s agenda is strongly focused on improving the country’s energy security, the policy and regulatory framework it lays out will be centered around that agenda.”

Wood Mackenzie’s goal is to help maintain the country’s allure for all companies taking part in activities across the entire oil and gas industry value chain, says Méndez. She adds that while it is true that oil and gas companies will have to adapt their business plans to the requirements and framework implemented by the new administration, Mexico remains an attractive investment.

Mexico has a privileged position both in terms of oil and gas and renewable energy sources, which will serve it well as it refocuses on energy security. It should also be good for businesses. Looking to provide greater market opportunities to potential clients in the oil and gas and electricity industries, not only on a national but also on a global level, Wood Mackenzie has created a Power & Renewables division. Wood Mackenzie Power & Renewables was created after the firm acquired MAKE, a research firm focused on wind power, and Greentech Media, an analysis group specializing in solar market intelligence. “With Wood Mackenzie’s extensive knowledge and expertise in the oil and gas industry, coupled with our strengthened capabilities in the power and renewable energy market, we are prepared to perform and offer more integrated studies for the entire energy industry, from oil and gas to electricity,” says Méndez, adding that “a higher added value is reached when a company is capable of taking into consideration, for market study purposes, the entire energy industry, as well as the present and future demand for energy at the local, national, regional and global levels.” When developing market research on supply and demand, it is necessary to have a clear and detailed view of both elements, Méndez says. While many companies may use reports provided by agencies like CENAGAS, CRE or the Ministry of Energy to create a forecast of supply and demand, Wood Mackenzie goes one step further. “Wood Mackenzie has an extensive database of oil and gas fields on a global level with which it can predict productivity and costs together with infrastructure bottlenecks that could affect the economics of those fields. We can also analyze the development of a country’s economic sectors and regions that will affect the demand of oil, gas and electricity. That refined view into the demand and supply elements that affect the economics of our clients, together with a comprehensive understanding of how the two elements relate, is the foundation of Wood Mackenzie’s success,” she adds.

According to Méndez, all clients want to solve one question: is a project economically viable or not? Wood Mackenzie provides an integrated vision of the entire problem, providing short and clear answers to almost all the critical questions a client might have.

Among its clients are most of the major oil and gas companies and global electricity generation companies that want to understand the business potential in Mexico as well as banks and investment funds looking to enter Mexico or increase their existing portfolios in the country by supporting these industries. “Wood Mackenzie is completely objective in all its analyses, databases, conclusions and recommendations; we always remain neutral to external factors,” she says.

The firm’s international reach is another beneficial factor. “We have strong relationships with major companies in other countries and markets that often leverage our presence in Mexico to bolster their footprint in the country.” It is also broadening its base of local clients. “Although smaller and with less experience compared to major oil and gas companies, Mexican companies are also interested in our services and in having long-term views and insights into their activities in the country.”