Mexico infrastructure seen as inadequate for future demand

Mexico needs to expand its midstream and pipeline systems to handle anticipated future demand as the nation reforms its energy policy and opens oil and gas development to foreign investors, Georgina Kessel, Mexico’s former secretary of energy, told a Mayer Brown LLP breakfast in Houston on Jan. 14.

Mexico needs to expand its midstream and pipeline systems to handle anticipated future demand as the nation reforms its energy policy and opens oil and gas development to foreign investors, Georgina Kessel, Mexico’s former secretary of energy, told a Mayer Brown LLP breakfast in Houston on Jan. 14.

“The state infrastructure is in appropriate condition,” Kessel said, adding expansions will be needed in the coming 15 years to avoid pipeline bottlenecks. Southern Mexico especially needs more pipelines to handle natural gas and oil products, she said.

Kessel is a partner in Spectron Energy & Infrastructure SC, a strategic consulting and transaction services firm in Mexico City. She served as Mexico’s secretary of energy during 2006-11 for President Felipe Calderon. She also previously served as board chairman for both Petroleos Mexicanos (Pemex) and for the Comision Federal de Electricidad (CFE), Mexico’s state power company.

Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars, said he sees Mexico keeping up its rapid energy reforms despite falling crude oil prices.

Meanwhile, Mexico’s residents gradually becoming increasingly aware of possible negative consequences of not opening the nation’s exploration and production to outside companies, Wood said, adding that Mexico experienced economic growth last year but not as much as it would have liked.

Separately, Reyes Heroles, Pemex executive director from 2006-09, has formed a group in Mexico with other former oil executives to advise and partner with companies interested in working in Mexico. Heroles is overseeing an energy development group called EnergeA.

Speaking with Bloomberg in an interview from his Mexico City home, Heroles said, “There is a large appetite for foreign companies, and our role is to accompany them from the beginning of a new project under the end.”

Jose Valera, Mayer Brown partner, said it’s common for people who previously worked as high-ranking government officials to become economic partners or consultants to assist new companies coming into a particular country.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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