How did you come to be in the energy industry?
As an International Tax Advisor I have always been involved with Energy Companies, however, when Energy Reform was enacted EY decided to dedicate me fully to Energy, guiding its efforts to become an eminent Energy Advisor in Mexico.
What are your top 3 responsibilities in EY?
Be sure that we are recognized as an eminent Energy Advisor, assure that we have a specialized Energy team in all services we render, and coordinate major engagements in the Energy sector.
Where do you see the greatest opportunity in the energy market?
Certainly the gap on infrastructure that was created with the underinvestment in the last decade.
Where do you see the greatest challenge when it comes to Mexico?
Being able to implement the details on each of the market segments. The overall legal framework is great but going from there to detail regulation is still the main challenge.
Do you feel that U.S. policies and specifically taxation changes will significantly change market trends in Mexico?
With regards to Energy I believe it will be hard or impossible to revert North American Integration, it is such a win-win situation that hardly when dust settles we will see significant changes. Of course, Mexico and the North America market would feel the effect of a more carbon friendly policy in the US, but still as a North American Energy Market.
Mexican government made a lot of fiscal and taxation changes since the beginning of the energy reform. Have there been many editions that the industry should be aware of? What other changes do you anticipate will come to force in the next 12 months?
Main framework has not changed, I have seen changes made in the last two years as detail implementation of the tax and government take regulations, most of them requested by the Industry. Mexican Government has been extremely receptive of the Industry requests and has been able to adapt regulations to international standards. I do not expect significant tax changes in the rest of Peña Nieto’s administration.
From your perspective, do you feel the energy reform in Mexico has been successful so far? Why? What questions remain?
With extremely challenging environment with oil prices going significantly under the last decade “standard”, results so far are good. Mainly on Mexican Round 1 and Clean Energy Generation auctions, with extremely successful bids showing great interest for the main players in the Industry and good results for Mexico as a country. However, there is still a lot to be done. Opening of the downstream market, transmission lines, electricity losses, natural gas markets, and reorganization of PEMEX and CFE are still in early stages and with a lot of challenges at the forefront.
If you could wave a magic wand over the global industry, what would you change and why?
Accelerate the transformation of Governmental Companies since inertia is holding some relevant changes to happen. They have a lot of internal challenges to adapt to and as soon as we can make them successful players under the new regulation, the easiest will be all other pieces to get done.
What one advice would you give a company looking to do business in Mexico?
Understand the Mexican regulations and the cultural/social challenges, this is a key factor to be a successful player within this tremendous market.