Monday, January 28, 2013
To Mexico's Pemex Board: My
Negative Votes on Certain Changes
By George Baker
MEI Market Note 154, "The Logic and Options for Energy Reform" (Jan. 10, 2013), we offer the new Mexican government
some unexpected advice: Reject any proposal for changes in CFE or Pemex that aspires to make either company more efficient—but
only in Mexico.
One of these measures is to merge the three business
units of Pemex (gas, refining, and chemicals) into one, keeping only the upstream unit unchanged.
2. The other idea is
to allow an offshore subsidiary of Pemex Gas (PGPB) to play a role as an investor in a major pipeline project that would bring
gas from the U.S. to Central Mexico.
Why restructuring of the government
oil company in this form is inadvisable
For more than a decade, senior officials
from Pemex, the Energy Ministry, Congress, and political candidates (including the PRI candidate that is the current president)
have flown (at taxpayer expense) to Canada, Brazil and Norway in search of insights about how to restructure Pemex to be “like
Petrobras” or “like Statoil,” both state‐majority‐owned oil companies.
The advice that the Mexican visitors received may be summarized
in five recommendations:
1. Legally restructure
Pemex as a mercantile company: Pemex, S.A., with a minority of shares available in a major stock market to global investors.
2. Organize yourselves as quickly as possible to be able to operate outside of Mexico.
3. Keep your good people in executive positions; don’t switch them out with political appointees
every six years.
Find a way to force Pemex to learn to compete, alone,
or in collaboration with other oil companies, for the license to explore and develop deep-water prospective blocks on both
sides of the Gulf of Mexico.
Develop a credible upstream regulator.
advice would seem to be that if the Peña Nieto administration wants to “restructure” Pemex, the only meaningful
step would be to restructure its legal foundation from that of an agency of the government to that of a commercial entity.
proposal merely to merge three government agencies (PGPB, PREF and PPTQ) into yet another government agency ignores the counsel
that elected and appointed public officials in Mexico had spent a decade, and millions of dollars, to acquire.
Read the full story
in Mexico Energy Intelligence (MEI), Jan. 19, 2013, Energia.com, Baker & Associates, Energy Consultants, Houston,
TX. George Baker is the director of Energia.com, a publishing and consulting firm based in Houston. He can be reached via
e-mail at email@example.com. Reprinted with permission.