News Article

Oil and Gas Policy Outlook: Human Talent, Infrastructure

Thu, 07/19/2018 - 13:41

Tabasco, Tamaulipas, Campeche and Veracruz make up Mexico’s key oil and gas states due to their significant onshore and offshore resources. But at Mexico Oil & Gas Summit 2018 on Wednesday at the Sheraton Maria Isbabel hotel in Mexico City, Alejandra Bueno, CEO of R&I Solutions and Strategic Advisor to Access to Energy, said the next consideration is the availability of human talent. “Next to geological resources, the most important consideration state authorities must make is their investment in human resources,” she said.

Wilver Mendez, Minister of Economic Development and Tourism for the State of Tabasco, agreed. “The state is promoting specialized degrees for the oil and gas industry,” he said. “University graduates in Tabasco have a 70 percent absorption rate in the oil industry.”

With total deepwater E&P investment in Tabasco estimated at US$26.6 billion, shallow-water E&P at US$10.9 billion and onshore E&P at US$1.28 billion, it is easy to see why more human talent is needed. Mendez highlighted that 31 of the contracts awarded in the licensing rounds and two onshore fields awarded in PEMEX farm-outs are located in Tabasco, with 13 new companies already working in the state, including Statoil, Eni and Murphy Oil.

While Mendez highlighted the importance of training human talent to strengthen local content and the national supply chain, Ernesto Marcos, Partner at energy consultancy Marcos y Asociados, said the country should learn from mistakes made in markets such as Brazil and Colombia. During its energy transition, Brazil set extremely high local talent requirements that the country was unable to meet. “Best practices can be incorporated from both markets but the authorities should bear in mind that this process is a marathon, not a race,” he said.

Apart from setting obtainable human talent requirements, Andrés Fusco, Energy Commissioner of the State of Tamaulipas, emphasized the importance of facilitating business for the operators investing in Mexico by creating a body to oversee key issues, such as environmental permitting and social issues. “Tamaulipas created the State Energy Commission, which is the first of its kind in the country,” he said.

With almost one-third of the awarded blocks in the bidding rounds located in Tamaulipas and close to US$59 billion due to be invested in the state, Fusco believes infrastructure development is another aspect that the government could promote to help operators. “In terms of port infrastructure, we have the Port of Tampico in the south of the state and the Matamoros port is currently under construction,” he said. “This will be developed as a one-stop supply base for the energy industry.” Tamaulipas is expected to attract US$64.4 billion in E&P investment.

Given the high investment levels, Marcos agreed that the state plays half the role in the oil and gas industry. “This is the case firstly because the state owns the resources and secondly because the establishment of infrastructure will benefit the state,” he said. “Support is needed not only on the federal level, but also on state, municipal and across all levels of government.”

Fusco said that the development of Matamoros displays Tamaulipas’ commitment to the oil and gas industry. “We are very receptive to the transition,” he said. “We have designed state-level policies to accompany the reform in innovation, education, technology transfer and infrastructure development.”

Mendez said that Tabasco aims to contribute through its ZEE, which will be set up in Paraiso. “This program will target urban development, infrastructure development, support for investors, protection and conservation of the environment and training of human talent, among other issues,” he explained. “All these factors can be used to support the oil and gas industry in the state.”