Sense of Urgency for UK-Mexico Cooperation

Q: What have been the highlights for the British Embassy’s work during your stay in Mexico?

A: The British Council has managed to communicate the growing strengths of the Mexican economy to more companies in the UK. Besides this, one of the most important projects we have been involved in was the 2010 Mexican Climate Change Summit in Cancun, which was a triumph for Mexican diplomacy in bringing climate change negotiations back on track. We claim it as a success because it culminated last June with the passing of a New Climate Change Law that is based heavily on the British model and which holds the Mexican government to legally binding targets. Furthermore, as particular highlight of our activity in Mexico I would also like to mention our work on strengthening economic reform provisions, increasing transparency, and human rights and freedom of expression, even though there is much work to be done in this respect.

Q: Why was the development of the trade relationship between the UK and Mexico developing at a slow pace between 2000 and 2009?

A: It was due to a lack of awareness of the opportunities that existed for British companies, since quite a lot of engineering products and power generation materials were being exported back and forth between the two countries, but not much retail or any other products. It was a question of the markets just not understanding and exploring each other. Nonetheless, trade did grow during that period, but mostly as a result of the European Union-Mexican free trade agreement that was signed in 2000 and because of the Mexican government’s industrial strategy, which has been successful in attracting huge international investment.

Q: People are finally starting to realize that there is a real opportunity in Mexico and it seems the world is starting to move its focus from Brazil and China to Mexico. How have you made sure that British companies get their fair share?

A: I can tell you that the sense of urgency has been with me since day one. I came to Mexico just after the economic and financial crises in the Western markets and it was becoming very obvious – as we found ourselves in the UK with a huge deficit – that we needed to export much more seriously and in a much more diverse fashion. The British Embassy has always urged companies to profit from the Mexican market and to get more Mexican investment into the UK. Clearly, Brazil slowing down at this moment has focused attention on those markets that are still continuing to grow, such as Mexico. The good macroeconomic fundamentals that were created and maintained through the previous two administrations in Mexico have provided a very solid basis for the new administration, and securing political consensus on reforms has been taken through with a sense of real urgency so far, which is generally considered to be critical for unlocking further potential in the market. However, it is not a zero sum game: I would like more exports from Britain in all directions, not only to Mexico.

Q: Should we be expecting some more bold moves from British companies in the mexican oil and gas industry?

A: I would certainly like British companies to be more present in the Mexican oil and gas market, and I think that companies will have to assess their own risks and games, but I think the work that the British Embassy is doing – to present Mexico as never before – is actually working and people are watching and listening to what is going on in Mexico.

Q: What are the key opportunities for British companies to contribute to the development of the Mexican oil and gas industry?

A: UK companies have developed a strong expertise in all the aspects of the oil industry whether upstream or downstream. Their know-how in exploration and production of unconventional and mature fields, developed through more than 40 years of experience in the North Sea, makes the UK an indispensable partner for Mexico. Furthermore, the UK subsea industry o†ers numerous technologies for Mexico’s deepwater developments; from risers to remotely operated vehicles (ROVs), as well as subsea trees, umbilicals, drilling fluids, and so on. On the other hand, UK companies could help with the exploration of huge shale gas fields in the north of the country, providing 3D and micro-seismic technologies, horizontal and extended reach drilling, and water treatment and management. In terms of transmission, distribution, and downstream activities, UK companies o†er monitoring and safety services, as well as high standard petrochemical products. UK companies could advise and associate with their Mexican counterparts in projects as diverse as pipeline construction, refinery reconfiguration, or co-generation projects, in a context of capacity expansion in the country

Q: What technological strengths and international best practices can British companies oer to the Mexican oil and gas industry?

A: UK companies collaborate very closely with universities and research centers to develop the technologies and skills the sector requires through joint industry projects. In particular, the model of spin-o†s – private companies created after a patented technology developed in a public university or research center – is very e†ective in promoting job creation and innovation. Furthermore, The UK is also a great promoter of low carbon strategies applied to industries with a high ecological footprint. Various companies o†er carbon evaluation services for the industry’s new projects that could apply to shale gas developments, the new Tula refinery, or the Pajaritos project. More generally, numerous internationally recognized certification companies o†er environmental, quality, and management advice specialized for the industry. Mexico’s growing commitment to carbon footprint reduction and environmental responsibility has engendered work for British companies in Mexico’s oil and gas market.

The British embassy has a trade and investment team focused on energy, which is dedicated to finding business opportunities for British companies in Mexico and to strengthening commercial ties with Pemex, the Mexican Petroleum Institute (IMP), and other main industry operators and regulators. British companies working throughout the entire value chain of Mexico’s oil and gas industry contribute to the improvement of Pemex’s performance in these aspects.

One example is Petrofac, since the company has already been awarded four contracts by Pemex. Along with its business, Petrofac’s commitment towards the development of local resources and the improvement of surrounding communities has grown. Petrofac is a very encouraging story for everyone, because it has come in and made a long-term commitment to the market, taking out contracts over a twenty to twentyfive year period. This commitment is also reflected in the company’s relationship with local communities, and having a local o·ce rather than working out of another country gives the company a personal presence. That is certainly something that we counsel those who really want to work in Mexico to consider doing.