Alejandro López-Velarde
Managing Partner
López Velarde, Wilson, Abogados
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View from the Top

Positive Social Impact Takes Center Stage

Tue, 01/21/2020 - 17:08

Q: How does Beristain view the changes impacting the oil and gas industry over the last year?

A: In many ways, we are in a different reality. Mexico has a new PEMEX, a new CFE and a new CRE. The old players within the industry are still here, but they have been joined by many fresh faces. This change offers Mexico the best chance to improve its situation and create a fair market, equal opportunities and a refined legal framework. This is our opportunity to create the best market environment that offers clearest regulation and freedom from corruption. When great changes are made, there can be short-term difficulties that are overcome with time and learning. Mexico’s oil and gas industry should have a beneficial impact on the social and economic landscape and benefit everyone, regardless of where in society they sit. 

Q: What are the short-term challenges facing Mexico following recent changes?

A: The Energy Reform was an incredible success for Mexico. This was the seed for the growth of the country’s energy sector. Now, the challenge is to cement the new laws that arrived with the reform to produce clean, open projects that benefit the country as a whole. Mexico is on the right path to achieve this. The industry has several large projects, including major pipelines, power plants and micro refineries, that have positive social impact targets fully integrated. This is essential. 

It is important to understand that some of the bodies involved in governing the industry, like ASEA, are still maturing and do not have the same experience and knowledge of those in other countries. But just as in previous administrations, new faces will learn and improve.

Q: What does Beristain provide private clients entering Mexico?

A: Beristain helps clients tropicalize their projects. Carrying out successful energy projects in Mexico is not easy: players must follow the law, the new criteria of the administration and adapt technologies for use here. It is important that clients remember they may not have such easy access to the types of infrastructure found in the US or Europe and that Mexico requires a greater social sensitivity than many other countries. Considering this, the need for support from a law firm that understands the reality on the ground is essential for clients. 

Beristain has the tools, knowledge and experience to aid clients in Mexico. We have been involved in natural gas pipeline and distribution system projects that have delivered a source of energy to over 2 million natural gas consumers. The pipeline project we are involved in Yucatan has an ambitious plan to create a social community, including hospitals and schools. Locals are involved and they expect this to be a project that delivers benefits to the area. The legal and technical points of our service are, clearly, very important. But here, the environmental and social aspect has a secondary importance that should always be considered.

Q: What elements of PPPs must be reconsidered to provide benefits to communities in Mexico?

A: It is important to understand the history of Mexico and its oil and gas industry when thinking about how PPPs can be improved. The communities and towns that worked with PEMEX in the past never received any benefits. They are underdeveloped and have many problems, including unethical land laws. Therefore, these communities act against any new projects planned in their region. This is understandable. 

The new administration offers the best scenario to reverse this trend and invest in Mexico. The Energy Reform’s authorities are moving in the right direction and corruption is being tackled, where only international companies with the highest international standards of compliance and humane ideals are being allowed to invest here.

 

Beristain + Asociados  is a Mexican law firm specialized in litigation, corporate law and energy. The firm places environmental and social considerations at the heart of its practices and has worked closely with PEMEX, CRE and CFE.