Ernesto Marcos Giacoman
President AMESPAC and Founding Partner
Marcos y Asociados
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Insight

Private Sector Alliances

Wed, 01/20/2016 - 11:24

One of the greatest questions regarding local content is how this will be measured. The Ministry of Economy has been working on this regard for some time now, and Ernesto Marcos Giacoman, President of AMESPAC and Founding Partner of Marcos y Asociados, says the methodology incorporates proposals from global organizations such as the World Bank, thus it follows international best practices. He claims AMESPAC has been involved in the development of the national content measurement mechanism even before the reform was passed, as this is in the association’s top priorities. “We want the development of an industry that works in parallel to operators, and some service suppliers can become operators through migrated contracts and farm-outs, so this subject means a lot to the association. Basically, we want to improve the technical and operative capacities of local industries to help develop the new energy sector,” he shares.

Since the beginning, AMESPAC has developed formulae aimed at measuring national content efficiently. Although the association’s opinions were taken into account in several cases, Marcos Giacoman says some the final results turned out to be different from what AMESPAC thought was best. “For instance, we wanted to include in the formula any purchase oil companies did in Mexico, even those considered for exportation purposes, because we want an internationally competitive industry. However, the authorities did not include this suggestion and the methodology limits national content to products and services used in the field that was formally assigned in a contract.” Regardless, he claims the Ministry of Economy’s methodology is quite broad and open, so even if a company cannot fulfill the local content requirements through equipment, goods, and specific services, players can rely on local employment, infrastructure investments, personal training, and even technological development. In the case of industrial safety, companies that have international certifications can validate those in Mexico, so they do not have to undergo a similar process in the country or change their standards. As for the percentages required in the E&P contracts awarded at the moment, Marcos Giacoman says these are realistic and operators have not voiced complaints so far.

AMESPAC is helping in the implementation of the methodology developed by the Ministry of the Economy in a way that enables contractors to offer services that comply with the local content requirements for operators. Members of AMESPAC and former PEMEX employees have formed a consulting firm specialized in international commerce and local content. The firm developed an information processing methodology that allows operators and subcontractors to fulfill these requirements while optimizing their resources. AMESPAC is also supporting the creation of a national registry of local suppliers for the energy industry. Marcos Giacoman says PEMEX has already developed its own system, and the Ministry of Economy is working in a more comprehensive one.