The Lain American Lawyer: March 2018 Latam_March 2018 | Page 7

News
Mexico energy investment unlikely to be impacted by elections,
NAFTA reboot
Investment in sector remains high since 2014 reforms as economy shows consistent growth
Mexico, the US and Canada are
currently engaged in the seventh
round of negotiations to forge a
new North American Free Trade
Agreement (NAFTA), while the
Latin American country is set to hold
presidential elections, though neither
event is seen as thwarting investment
into Mexico’s energy sector.
The industry has seen a surge
in private investment following
the 2014 reforms, lawyers say. The
most recent oil and gas auction
(held on January 31) awarded 19 of
29 deepwater areas on offer, and is
expected to bring in investment of
some $93 billion.
“This shows the confidence of
investors irrespective of any result
of the NAFTA negotiations or of the
elections,” Daniel del Río, senior
partner at Basham, Ringe y Correa in
Mexico City, tells The Latin American
Lawyer.
“At first many projects were put
on hold, but as time has gone by it
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appears more likely that NAFTA will
be renegotiated [and not cancelled],
and it has become clearer which areas
will be affected and which will not
be,” Del Río adds. “You can’t erase
with the stroke of a pen the fact that
our economies have developed over
the last 24 years,” he says.
Since NAFTA came into effect
in 1994, the three countries have
stepped up their energy integration,
creating a mutually beneficial market
for cross-border natural gas sales and
electricity transmission.
And with regards to the election,
while left-wing candidate Andrés
Manuel López Obrador was seen
as the presidential hopeful most
likely to unsettle investors during
his 2006 and 2012 campaigns, in
this year’s race he has presented a
more moderate, rational plan, and
currently leads the polls by around
10 per cent.
He is also the only candidate to
have nominated an energy minister
2/26/18
1:50 PM
PEMEX announced biggest onshore oil
discovery in 15 years in December
in the event of a victory, and has
lauded the auction process as
transparent and good for Mexico.
“The energy reform is a
constitutional one, and would
therefore require a majority in
congress, meaning that undoing the
reform looks unlikely,” Benjamín
Torres-Barrón, a partner at Baker
McKenzie, says.
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March 2018 • THE LATIN AMERICAN LAWYER •
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