Hector Dagdug
Associate
Dagdug & Rangel President of COPARMEX Tabasco
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View from the Top

Legal Advice from the Oilfield

Mon, 09/01/2014 - 12:40

Q: What have been your most important achievements in the Mexican oil and gas industry?

A: Before becoming the President of COPARMEX Tabasco, I founded Dagdug & Rangel Associates to support foreign companies looking to invest in the Mexican market. We primarily propose two legal options to these firms, which are opening local branches of their companies or subsidiaries. We usually recommend the subsidiary route so they can register as Mexican firms, thus being able to more efficiently manage their corporate and fiscal structures. Doing so also takes advantage of the benefits that international trade agreements grant these enterprises to avoid double taxation. We help our clients throughout the entire legal and contractual process, starting from contract assessment of a firm’s service proposal in civil terms to advising on commercial, fiscal, employment, administrative, and corporate matters. Additionally, we act as their representatives in dealings with PEMEX, government bodies at all levels, and the private sector.

Q: How can your proximity to PEMEX and its subsidiaries help companies introduce their technologies in Mexico?

A: Being based in Villahermosa, where many of PEMEX’s upstream offices are located, and our proximity to Ciudad del Carmen, provides us with a competitive advantage. We are providing assistance to firms that are interested in interacting and learning about the new technologies that PEMEX is using or looking to introduce through PEMEX Procurement International (PPI). Another component of our services is obtaining local copyrights for the technologies of foreign companies. These companies need local expertise when offering a new product or service that must be approved by PEMEX. We take the necessary measures and create a strong product profile to facilitate its acceptance by PEMEX. After PEMEX has tried the technology, the next step is to obtain a local copyright through the relevant government entity.

Q: What are your expectations of the Energy Reform and how will the new legal framework affect your services?

A: The Energy Reform will affect service providers as its objective is to attract large foreign companies and their investments rather than supporting SMEs. Contracts with these companies will revolve around four main areas: service contracts, profit-sharing, production-sharing, and licences. As a specialized law firm that has worked in the corporate and energy sectors, we have an in-depth understanding of the common business models in the current Mexican market. The main goal of our firm, and of COPARMEX Tabasco, is to foster public-private collaboration. Stemming from that, our most important project is to help create integrated service companies that can work as part of a consortium with new foreign investors.

Q: What are the respective challenges and opportunities that Mexican companies will encounter in this revamped market?

A: It will be a challenge for Mexican firms to match the competitiveness of foreign companies. Companies in the state of Tabasco will be the best by far as they enjoy the necessary experience to remain well-positioned. These companies have been working for a long time in the Mexican oil and gas industry, developing a distinct competitive advantage. Another important factor that will be attractive to newcomers is the fact that local firms use safety and environmental standards that have been adapted to PEMEX’s requirements. Furthermore, local firms are already nationally certified while their foreign counterparts are not. Combining all of these aspects will be very important for foreign companies since they are not yet familiar with PEMEX’s strict demands and the conditions for participation in its projects.

Q: How will COPARMEX Tabasco help companies develop their activities in the region?

A: PEMEX sees us as the most important business organization in the region and recognizes our leadership in the energy sector. COPARMEX Tabasco has implemented a certification program that instructs Mexican and foreign companies about PEMEX’s standards. We currently offer three certificates that will help these companies to be well-prepared when operating in the Mexican oil and gas industry. Petrosureste is our integrated service company, whose purpose is to help and mediate the interaction between foreign companies entering the Tabasco oil and gas market. Petrosureste helps these companies get contracts with PEMEX and guide them in the right direction as they set up their operations. We are also preparing Villahermosa for the upcoming changes. This important oil and gas hub is ready to be Mexico’s energy destination as the investment in the Port of Frontera will detonate vast investment in the region through the deepwater projects PEMEX has in store. We have proposed the state of Tabasco to actively collaborate with Houston in order to make Tabasco, and its capital Villahermosa, a competitor among the world’s leading energy hubs.