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The Mexican Energy Sector

The current legal framework reserves oil and gas upstream and downstream operations to the state. The private sector is allowed to trade, transport and distribute natural gas, and to generate power through Independent Power Producers and as co-generation.

Except for a small number of petrochemicals defined as basic, private investors participate in the Mexican petrochemical sector. A niche with a vigorous growth potential is the oil and gas services sector, particularly offshore, where opportunities develop every day for new entrants.

Recent financing scheme of public, private partnerships Energy Reforms, has resulted in the use of various financing and turn-key alternatives that have increased the scope of oil and gas service companies and energy related contractors, which on occasions have effectively become infrastructure operators, project managers or integral service providers. This along constitutional reforms will enhance opportunities for growth.

There are two challenges faced by any participants in this market:

  1. A unique set of risks derived from contractual, regulatory and cultural hurdles, and
  2. The need to properly capitalize and finance Mexican operations according to the risk profile.

In order to succesfully meet these two challenges it is necessary to clearly understand, calculate and hedge this country risk. An important role we play is that of “translators of risk”.

Key Marcos & Asociados provides experience and through knowledge of projects executed under public works law. We provide extensive support and management skills in contract administration process of projects.