Leveraging Local Expertise for Growth
Q: How has the López Obrador administration’s arrival impacted your clients’ projects?
A: The largest projects are moving full speed ahead without any interruption. I suspect this is because despite all the noise emanating from the administration, there has been no legislative change. While we do not necessarily like the rhetoric being used, we understand that this is not a step backward. Although the cancellation of NAIM was disappointing, development in other areas continues. None of our clients has canceled projects or said they want to leave the country.
Most, if not all, of our clients remain cautiously optimistic and many have expanded operations. Gonzalez Calvillo is enjoying similar success. We are involved in four projects valued at more than US$1.5 billion each. The largest is a German petrochemical project valued at US$5 billion.
Q: How did you calm the concerns of your clients during the 2018’s presidential elections?
A: Our clients’ concerns were all related to the Energy Reform and whether it would be repealed. There were even concerns that the US would threaten to interrupt the delivery of natural gas to Mexico due to the strained relationship between the two countries. This was a “perfect storm” scenario.
The administration knows that the major projects in oil and gas production and those in energy are absolutely essential for Mexico. Therefore, these projects are not being touched. Some agreements are being revisited, including CFE pipeline contracts, but the government must understand that these agreements are binding, not optional. In many of these agreements, arbitration and jurisdiction takes place in New York. The delivery of oil and gas between the US and Mexico is simply not the president’s choice.