Oil & Gas Journal has published the article "Mexico's energy needs: The AMLO era," written by Akin Gump cross-border transactions partner Dino Barajas. Barajas writes that the Mexican energy sector is at "an energy policy crossroads" and uses the article to examine the policies of President Andrés Manuel López Obrador (AMLO).
Barajas writes that AMLO has rolled back many of the previous administration's energy reforms. He has also reestablished the federal government "as the primary architect of energy development within Mexico's boundaries" and cancelled many previously announced and badly needed infrastructure expansions. As a result, parts of the country have been plagued by natural gas transportation congestion.
The article predicts several new opportunities will arise during Mexico's "upcoming period of market realignment and regulatory uncertainty." Barajas suggests that developers align themselves with strong local partners "who can serve as anchor clients in key markets." He also offers some key considerations for successful ventures, such as "tax and corporate structuring considerations and dispute resolution mechanisms."
Finally, Barajas points out that some investors, as a result of the changes Mexico has seen, "are now able to purchase development rights to projects at extremely competitive prices." He concludes by noting that Mexico's near-term dependence on imported natural gas "will continue to inextricably tie both markets together as a necessary supplier and consumer."