THE NEW MEXICAN ENERGY MODEL - Special Feature

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THE NEW MEXICAN ENERGY MODEL - Special Feature
Special Feature     The Lifestyle            Negocios
       Mexico              Riviera Nayarit,         para
       Feeding the World   Mexico’s Pacific Coast   exportadores
                           Treasure

                      THE NEW
                      MEXICAN
                 ENERGY MODEL
2014
 XI
THE NEW MEXICAN ENERGY MODEL - Special Feature
M
           exico is on the move. Our country has    generates great opportunities for new produc-
           concluded an important transforma-       tive investments and latest technologies.
           tive cycle that includes 11 structural        The Tax Reform increases the State’s finan-
reforms. With these profound changes, Mexico        cial capacity and favors public investment in pri-
is breaking the restraints that have prevented it   ority areas for economic activity, such as science,
from reaching its full potential.                   technology, and infrastructure. In its turn, the
    Six of these transformative reforms aim to      Financial Reform gives place to the conditions
elevate the productivity and competitiveness        that allow the robust Mexican bank to par-
of our economy, to accelerate its growth. They      ticipate more actively in the country’s growth,
form a platform that will enable us to drive de-    through more credit options and at lower inter-
velopment in the coming years.                      est rates for families and businesses.
    With the Labor Reform, Mexico ad-                    Finally, the Energy Reform will allow the par-
vances towards a more efficient and flexible        ticipation of a higher number of companies, thus
labor market that permits the incorporation         modernizing the sector with more productive in-
of women and young adults. Meanwhile, the           vestment and cutting-edge technologies. This en-
Economic Competition Reform establishes             sures the supply of electricity and hydrocarbons at
clear rules that set competing companies on a       competitive prices for industries and homes.
level footing and bring down entry barriers to           The transformative reforms are already a real-
new participants across all sectors.                ity. Now, the Mexican Government is putting them
    In the same way, the Telecommunications         into action. To do so, we follow an agenda of ac-
and Broadcasting Reform encourages effective        tions in concrete terms that will allow them to be
competition in the sector, enabling Mexico to       implemented effectively. By combining the efforts
close the digital gap and integrate more Mexi-      of authorities, the private sector, and citizens, we
cans into the knowledge society. In addition, it    are building a more prosperous Mexico.
                                                         .

                                    Enrique Peña Nieto
                          President of the United Mexican States
THE NEW MEXICAN ENERGY MODEL - Special Feature
Table of Contents November 2014

                   16                               22                                  46

           Special Report                    Business Tips                    Mexico in the World
       Green Solutions 2014:              Mexico and Renewable             Opportunities for Cooperation
       Opportunities for Green             Energy Generation            between Mexico and the Netherlands
        Investment in Mexico                                             in the Food and Agriculture Sector

      cover feature

      THE NEW MEXICAN
      ENERGY MODEL
      18

                                                                                                              archive
                                                                                                               photo
             From
             ProMéxico
                             10            12      Briefs                     24
                                                                                       figures

 Special Feature: Mexican Food Industry                                 Mexico’s Partner
 40     Mexico Feeding the World   56     Cool Flavors                   26    Swiber Offshore México

        La Nao Foods               58     Mieles Campos Azules           28    3Tek Solar
 48
                                                                         30    Gamesa
 50     Intergan                   60     Comal Foods                    32    Sunpower

 52     Prinsa                     62     Agri-food Industry Figures     34    Eosol Energy
                                                                         36    Newen
 54     CAFESCA                    64     Preserving Mexico’s Flavors
                                                                         38    Risen Energy México
THE NEW MEXICAN ENERGY MODEL - Special Feature
The Lifestyle                                                                        The Complete Guide
                                                                                                                    to the Mexican Way of Life
courtesy of cirque du soleil

                                                      66
                                                                 courtesy of fr-ee
                                                                                                                             68

                                                                                                                            Fernando Romero:
                                                     The                                                                    Beauty, Sustainability,
                                                     Lifestyle                                                              and Economic
                                                     Briefs                                                                 Development
       photo

                                                                    photo
courtesy of fernando montiel klint

                                                                                     70                                                  78

                                                                          Mexico,                                                       Protecting
                                                                          a Series of                                                   Our Water,
                                                                          Contemporary                                                  Land, and
                                                                                          archive

                                                                          Snapshots                                                     Skies
       photo

                                                                                           photo

                                                                                                    Riviera Nayarit,
                                                                                                    Mexico’s Pacific Coast Treasure
courtesy of pacific golf course

                                                                                                    Nestled between the Pacific and the Sierra Madre
                                                                                                    Occidental, in the space of just a few years this
                                                                                                    tropical paradise has become one of the country’s
                                                                                                    most interesting tourist destinations, whether you
                                                                                                    want to relax, take up residence, or do business.

                                                                                                                                               74
       photo
THE NEW MEXICAN ENERGY MODEL - Special Feature
| Negocios ProMéxico

          Para exportadores

                                                       Reflexiones
                                                       en torno
                                                       a la sustentabilidad
                                                       energética en México

                                                                                    90

                De
                ProMéxico
                                  82
                                                        breveS                 84

                       Encuentro 1:1,                               Apuntes y reflexiones
                       creatividad de sur a norte                   para concretar negocios
                                                                    en el mercado peruano

                                                  87                                          92

                       La internacionalización                      Retos para
                       de servicios:                                la internacionalización
archivo

                       Experiencias del turismo                     de las pymes Mexicanas
                       de reuniones
                       en Francia
 fotos

                                                  88                                          94

                                                                                                   November 2014                      7
THE NEW MEXICAN ENERGY MODEL - Special Feature
| Negocios ProMéxico

                                                                                 ProMéxico
                                                                             Francisco N. González Díaz
                                                                                        CEO

                                                                               Karla Mawcinitt Bueno
                                                                             Communication and Image
                                                                                General Coordinator

                                                                            Sebastián Escalante Bañuelos
                                                                         Director of Publications and Content
                                                                       sebastian.escalante@promexico.gob.mx

                                                                                     Copy Editing
                                                                                Felipe Gómez Antúnez
                                                                           Jorge Morales Becerra Contreras

                                                                                    Advertising
                                                                            negocios@promexico.gob.mx

                                                                                     Cover Photo
                                                                                       Archive

                                                                           Editorial Council
                                                                           consejo editorial
                                                                            Ildefonso Guajardo Villarreal
                                                                        Francisco de Rosenzweig Mendialdua
                                                                                Enrique Jacob Rocha
                                                                             Francisco N. González Díaz
                                                                   Embajador Alfonso de Maria y Campos Castelló
                                                                              Luis Miguel Pando Leyva
                                                                          Francisco Javier Méndez Aguiñaga
                                                                                 Rodolfo Balmaceda
                                                                                   Guillermo Wolf
                                                                                 Jaime Zabludovsky
                                                                                  Gabriela de la Riva
                                                                              Adolfo Laborde Carranco
                                                                                 Silvia Núñez García
                                                                            María Cristina Rosas González
                                                                               Ulises Granados Quiroz
                                                                              Karla I. Mawcinitt Bueno

           Negocios ProMéxico es una publicación mensual editada por ProMéxico, Camino a Santa Teresa número 1679, colonia Jardines del Pedregal, delegación
           Álvaro Obregón, CP 01900, México, DF Teléfono: (52) 55 5447 7000.
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           ISSN: 2007-1795.

Negocios ProMéxico año 7, número XI 2014, noviembre 2014, se imprimió un tiraje de 13,000 ejemplares. Impresa por Cía. Impresora El Universal, S.A. de C.V. Las
opiniones expresadas por los autores no reflejan necesariamente la postura del editor de la publicación. Queda estrictamente prohibida la reproducción total o parcial de
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Although this magazine verifies all the information printed on its pages, it will not accept responsibility derived from any omissions, inaccuracies or mistakes. November 2014.

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                              Negocios ProMéxico at negocios.promexico.gob.mx.                          Its sale and commercial distribution are forbidden.

                                                                                                                                                                                          November 2014                      9
THE NEW MEXICAN ENERGY MODEL - Special Feature
From
proméxico.
                 Few countries can truly claim       try, this edition includes content related
                 such a profound transforma-         to the country’s agri-food sector. Mexico
                 tion as Mexico. The New             has a gastronomic tradition recognized as
                 York Times recently referred        Intangible Heritage by UNESCO. It offers
                 to it as “radical.” Probably        a vast assortment of products that have
one of the most relevant steps is the trans-         innovated their processes and penetrated
formation of the energy sector. It opens a           traditional and non-traditional markets.
great attractive market to foreign investors,        As a result, the country occupies a privi-
through services, licenses, profit-sharing           leged role as a producer and supplier of
and production-sharing agreements. In few            food and beverages.
words, for the first time in over 75 years,               Mexico is the leading exporter of beer,
private companies can participate in Mex-            mango, mezcal, papaya, tomato and tequila,
ico’s energy sector. A Citibank study esti-          among other products. It excels in the export
mates that the impact of the energy reform           of confectionery, baked goods and meat prod-
will attract over 40 billion usd in invest-          ucts, to name just a few examples. Moreover,
ment flows between 2015 and 2019.                    it is the sector’s second most important sup-
    In addition, Mexico represents a window          plier to the US and the third largest producer
of opportunity for the development of renew-         of processed foods in America.
able energies. Mexico is the third most impor-            ProMéxico has driven the formation
tant destination in the world for investment         of agri-food export consortia in order
in solar energy projects and its wind potential      to strengthen small producers and help
is one of the most attractive. The renewable         them to export and internationalize. For-
energy sector has recorded steady growth in          eign demand for agri-food products from
the country during the last decade. Installed        Mexico has increased significantly, not
capacity for energy generation from renew-           only to serve Hispanic consumers, but
able sources has grown substantially and             also to supply Halal and Kosher markets.
conditions are ripe for business development              Mexico definitely has many competi-
in the sector, as you will discover in this issue.   tive advantages. Energy and agri-food are
    In order to go deeper into business de-          just two we want to highlight for the in-
velopment and opportunities in our coun-             ternational business community.

                                      Welcome to Negocios!

                                  Francisco N. González Díaz
                                               CEO
                                            ProMéxico

                                                                                                      11
THE NEW MEXICAN ENERGY MODEL - Special Feature
BRIEFS                                                                                                                                                      BRIEFS

                                                                              ELECTRIC                                                                                                                              AEROSPACE

                                                                             WEG builds new plant                                                                                                                  cutting edge training
                                                                             Brazilian electrical equipment manufacturer WEG will build a                                                                          European aircraft manufacturer Airbus        The 15 million USD center will pro-
                                                                             new production plant in the state of Hidalgo, with an investment                                                                      will open a Center for Research and In-   vide training for pilots and other airline
                                                                             of 120 million usd, to provide metallurgical and machining pro-                                                                       novation in Aerospace Engineering un-     operations personnel.
                                                                             cesses for metal parts.                                                                                                               der the auspices of the Autonomous Uni-
                                                                                                                                                                                                                   versity of Nuevo León.                    www.airbusgroup.com
                                                                             www.weg.net

                                                                                                                                                         archive
archive

                                                                                                                                                          photo
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                                                                                                                                                                    AUTOMOTIVE

           BIOTECHNOLOGY
                                                                                                                                                                   sumitomo targets
                                                                                                                                                                   aguascalientes
          STRONG SEEDS FOR A STRONG INDUSTRY

                                                                                                                                                                                                                                                                                                      courtesy of airbus
                                                                                                                                                                   Japanese auto parts maker Sumitomo
          US-based biotechnology multinational Monsanto inaugurated                                                                                                Electric Industries plans to build a new
          a new seed technology research center in the western state of                                                                                            manufacturing plant in the state of Aguas-
          Jalisco. The new site is planned to centralize the company’s ef-                                                                                         calientes. The projected 28 million USD fa-

                                                                                                                                             archive
          forts to develop new hybrid and genetically modified strains of                                                                                          cility will produce sintered parts for trans-
          corn. Monsanto expects to invest 90 million usd over the next                                                                                            mission gears and key engine parts.

                                                                                                                                                                                                                                                                                                          photo
          five years in its new research center.

                                                                                                                                                 photo
                                                                                                                                                                   global-sei.com
          www.monsanto.com

                                                                                                                                                                                                                                                              AUTOMOTIVE
                                                                                                    RENEWABLE ENERGY
                                                                                                                                                                                                                                                             TOYODA GOSEI
                                                                                                   CLEAN POWERED                                                                                                                                             LANDS IN GUANAJUATO
                                                                                                   INNOVATION
                                                                                                                                                                                                                                                             Japanese auto parts maker Toyoda Gosei
                                                                                                   French electricity company Schneider Elec-                                                                                                                will invest 67 million usd to establish a
                                                                                                   tric will construct Mexico’s first 100% so-                                                                                                               new manufacturing plant in Guanajuato.
                                                                                                   lar-powered building in the northern state                                                                                                                The site is projected to produce radiator
                                                                                                   of Nuevo León, which is expected to be up                                                                                                                 grills, console boxes and other parts for
                                                                                                   and running by 2016.                                                                                                                                      the region’s automotive OEMs.
                                                                                                       The building, to be located in the city
                                                                                                   of Monterrey’s technological research                                                                                                                     www.toyoda-gosei.com
                                                                                                   and innovation park (PITT) –a hub for
                                                                                                   local tech firms– will house Schneider’s
                                                                                                   design center.
                                                                                                       The building, to be constructed with
                                                                                                   the support of the federal government and
                                                                                                                                                         archive
archive

                                                                                                   boasting zero electricity consumption, will
                                                                                                   occupy land adjacent to the company’s of-
                                                                                                   fices in the IT hub.
                                                                                                                                                          photo
 photo

                                                                                                   www.schneider-electric.com
THE NEW MEXICAN ENERGY MODEL - Special Feature
BRIEFS                                                                                                                                             BRIEFS

                                                                                                    RENEWABLE ENERGY                                       infraestructure

                                                                                                   capturing sun power
                                                                                                                                                          manzanillo is among
                                                                                                   Mexican solar power developer Iusasol is               the world’s top 100 ports
                                                                                                   building a new photovoltaic cell manufac-
                                                                                                   turing plant in Estado de México. The 200              Containerisation       International     and
                                                                                                   million usd facility is intended to serve              Lloyd’s List issued their traditional annu-
                                                                                                   growing demand driven by Mexico’s re-                  al ranking of the list of the top 100 global
                                                                                                   cently implemented energy reform.                      containerized ports.
                                                                                                                                                              According to the publication, eight
                                                                                                   iusasol.com                                            ports of Latin America are among the top
                                                                                                                                                          100 ports worldwide. The Mexican port of
                                                                                                                                                          Manzanillo is ranked 68th worldwide.
                                                                                                                                                              According to Lloyd’s, Manzanillo is
archive

                                                                                                                                                                                                                                                                                                  archive
                                                                                                                                                          the main commercial port for Mexico’s
                                                                                                                                                          containerised cargo and one of the five
                                                                                                                                                          largest hubs in Latin America.
 photo

                                                                                                                                                                                                                                                                                                      photo
                                                                                                                                                              In 2013, Manzanillo began operations
                                                                                                                                                          at the port’s second specialised container
                                                                                                                                                          terminal (TEC II), that Philippines-based
           RENEWABLE ENERGY                                The wind farm will be equipped with                                                            International Container Terminal Services      have the capacity to handle 2 million           will have three docks in order to handle
                                                       33 turbines, each with rated power of 1.5                                                          Incorporated (ICTSI) will run under a 37       TEU annually by 2020.                           super post-panamax vessels.
                                                       MW and a rotor diameter of 77 meters,                                                              year concession through Contecon Man-             TEC II, with a first phase 400,000 TEU
          winds of success                             mounted on 80-meter-high (hub height)                                                              zanillo.The three stage ICTSI project will     capacity, occupies an area of 73 ha and         www.lloydslist.com
                                                       steel towers.
          Spanish renewable energy developer               Construction work on the site –near
          Acciona Energía has signed a contract        the Eurus, Oaxaca II, Oaxaca III and                                                                energy
          worth 111 million usd with private in-       Oaxaca IV wind farms, all owned by
          vestors Actis and Comexhidro for the         Acciona– is expected to conclude in the
          design, engineering and construction of a    fourth quarter of 2015.
                                                                                                                                                          A positive reform
          49.5 MW wind farm in Mexico.                     When completed, the Ingenio wind
              The Ingenio wind farm, located in the    farm will produce enough clean energy
          Isthmus of Tehuantepec in Oaxaca, in-        to power 125,000 Mexican homes, while                                                              According to BBVA Bancomer’s Regional

                                                                                                                                              archive
          cludes, through additional contracts, the    avoiding the emission of 206,000 metric                                                            Sector Situation analysis, thanks to the
          sale of the project developed by Acciona     tons of CO2 that would have been pro-                                                              recently implemented energetic reform in
          Energía México to its new owners, plus the   duced by conventional power stations.                                                              Mexico, the states of Tabasco, Veracruz,

                                                                                                                                                  photo
          operation and maintenance of the wind                                                                                                           Chiapas, Puebla, Tamaulipas, Nuevo León,
          power complex for 15 years.                  www.acciona-energia.es                                                                             Coahuila and San Luis Potosí will register
                                                                                                                                                          a higher economic dynamism by 2018
                                                                                                                                                          than the one they would have observed
                                                                                                                                                          without the reform.
                                                                                                                                                              According to the document, the larg-
                                                                                                                                                          est oil production platform imply that
                                                                                                                                                          Tabasco, Chiapas and San Luis Potosí
                                                                                                    AUTOMOTIVE

                                                                                                                                                                                                                                                                                                  archive
                                                                                                                                                          will accelerate their growth. With the re-
                                                                                                                                                          form, Tabasco will grow 7%; Chiapas, just
                                                                                                   brp’s third in mexico                                  over 4% and San Luis Potosí, above 5%;

                                                                                                                                                                                                                                                                                                      photo
                                                                                                                                                          whereas without reform, the expansion of
                                                                                                   Canadian sports vehicle maker Bombardier               the Gross Domestic Product (GDP) in Ta-
                                                                                                   Recreational Products (BRP) plans to begin             basco would be close to 4.5%; in Chiapas,
                                                                                                   construction on its third manufacturing                2.5%, and San Luis Potosí, under 4%. “To           In an exercise on energy projections,           Based on the potential growth of these
                                                                                                   plant in Mexico in 2014. The 55 million                enable greater oil production platform in      BBVA Bancomer considers that the produc-        state economies, BBVA Bancomer predicts
                                                                                                   usd site, to be located in the northern bor-           the coming years is one of the main goals of   tion of oil and natural gas will increase 20%   that Mexico’s GDP will grow a percentage
                                                                                                   der city of Ciudad Juárez, Chihuahua, will             energy secondary laws. The benefits of this    by 2018; however, it also estimates that the    point more than the expected without en-
                                                                                                   manufacture all-terrain vehicles.                      will be reflected primarily in those states    share of hydrocarbon extraction from wa-        ergy reform in 2019, to reach 4%.
archive

                                                                                                                                                          that concentrate both conventional and un-     ters, generally attributed to Campeche,
                                                                                                   www.brp.com                                            conventional resources,” says the report.      would be 20% lower compared to 2014.            www.bbvaresearch.com
 photo
THE NEW MEXICAN ENERGY MODEL - Special Feature
Negocios ProMéxico | Special Report                                                                                          photo   archive                                                                                                        Special Report | Negocios ProMéxico

                                                                                                                                                                                                                                         The event has become a
Green                                                                                                                                                                                                                                    space for dialogue that
Solutions                                                                                                                                                                                                                                unites the triple helix of the
                                                                                                                                                                                                                                         public and private sectors
2014:                                                                                                                                                                                                                                    and academia, with the
Opportunities                                                                                                                                                                                                                            goal of sharing new trends
for Green                                                                                                                                                                                                                                and linking networks that
                                                                                                                                                                                                                                         develop into innovation and
Investment                                                                                                                                                                                                                               business opportunities for
in Mexico                                                                                                                                                                                                                                the national economy. Thus,
                                                                                                                                                                                                                                         the promotion of a forum
The mitigation of climate change,                                                                                                                                                                                                        of this scope is fundamental
economic sustainability, and
                                                                                                                                                                                                                                         to motivate the domestic
care of the environment have
been key components for the                                                                                                                                                                                                              market and the growth of
Mexican government, companies,                                                                                                                                                                                                           green business in Mexico.
institutions, and other organizations.
The transition towards the use of
clean energy sources, the reduction
of energy consumption, and support
for sustainable city models will
be crucial components for Green
Solutions 2014.
 by francisco n. gonzález díaz*

Almost a quarter of the installed capacity
for energy generation in Mexico is derived
from renewable sources. Installed capac-
ity is currently at 15 gigawatts (GW), but is
expected to reach 35GW by 2027. Mexico
is convinced that the development of clean
technologies and energy generation from al-
ternative sources are elements that cannot be
put aside. For this to be consolidated, more
incentives must be put in place to attract the
green investment needed by the sector.
     Green Solutions has been and is one of
the major efforts of the Mexican govern-
ment to promote sustainable business and
attract green investment. As the name sug-
gests, it is a forum to seek and find solutions   of green business in Mexico.                3. Promote business meetings.                    undergoing and the potential for the future.   •  Environmental public policies.              The impetus from the Mexican gov-
that achieve greater energy efficiency, reduce        This year will be the 5th edition of    4. Offer solutions in terms of financing,        Structural reforms were proposed and ad-       •  Agro-industry and sustainable manu-     ernment towards events like Green So-
carbon dioxide emissions, and optimize the        this important event. Green Solutions           liaison, knowledge of regulations, and       opted in several sectors which are of great       facturing.                              lutions shows the country’s commitment
use of natural resources, among other goals.      2014 will be held on November 5 and 6           investment opportunities related to the      importance for the environment, energy,        • Green financing.                         to its environmental future, but also to
     The event has become a space for dia-        and ProMéxico will be joined by the state       recent approval of reforms.                  and education. They give us a glimpse of the   • Renewable energies.                      attaining business opportunities aimed
logue that unites the triple helix of the         of Aguascalientes, which has decisively     5. Communicate the investment opportu-           modernization and optimization of “green”      • Opportunities and green investment       at promoting the use of clean energy
public and private sectors and academia,          pushed the fight against climate change         nities derived from the recent structural    sectors, allowing sustainable development         for SMBs.                               sources.
with the goal of sharing new trends and           and care of the environment. This edition       reforms.                                     and taking our country to a more competi-         Green Solutions has successfully held       Great transformations have been made
linking networks that develop into innova-        will aim to:                                    Some 3,500 participants are expected.        tive level in the global economic arena.       four previous editions with an atten-      a reality thanks to a meeting of minds.
tion and business opportunities for the na-       1. Spread Mexico’s potential and com-       The main topic of this forum is Green invest-        In an effort to support the sustainable    dance surpassing 15,000; 5,000 business    Mexico is pulling together to ensure a
tional economy. Thus, the promotion of a              mitment to green investment.            ment to bring Mexico to its full potential.      products and services industries in Mexi-      meetings and 115 conferences, panels,      more prosperous, greener Mexico. N
forum of this scope is fundamental to mo-         2. Transfer public environmental policies   The relevance of this topic is directly linked   co, Green Solutions 2014 will address the      and seminars. In 2014, new horizons are
tivate the domestic market and the growth             to the business sphere.                 to the transformation process the country is     following topics:                              sought.                                    *CEO of ProMéxico.

16                                                                                                                            November 2014    November 2014                                                                                                                        17
Negocios ProMéxico | Cover Feature                                                                     photo   courtesy of pemex                                                                                                                     Cover Feature | Negocios ProMéxico

                                                                                                                                             The intention is to create competitive mar-   tal Protection Agency of the Hydrocarbons        A fundamental aspect of the
                                                                                                                                             kets that enable, in the short and medium     Sector (ANSIPA). Finally, the Mexican Pe-        reform is the transformation
                                                                                                                                             terms, the reduction of energy costs, a se-   troleum Fund for Stabilization and Devel-
                                                                                                                                             cure supply, and to reach all current and     opment –a public trust fund managed by           of both Pemex and
                                                                                                                                             potential consumers in the most efficient     Mexico’s Central Bank– was created and           the Federal Electricity
                                                                                                                                             and sustainable way.                          will be responsible for the long-term man-
                                                                                                                                                                                                                                            Commission (CFE) into State-
                                                                                                                                                 These changes throughout the energy       agement of oil revenues.
                                                                                                                                             value chain adhere to one of the central          A fundamental aspect of the reform is        owned productive enterprises,
                                                                                                                                             goals of the current Administration: to       the transformation of both Pemex and the         so that now they have the
                                                                                                                                             modernize the country’s institutional ar-     Federal Electricity Commission (CFE) into
                                                                                                                                             rangement to give the Mexican economy         State-owned productive enterprises, so
                                                                                                                                                                                                                                            obligation to generate value
                                                                                                                                             heightened competitiveness. Along with        that now they have the obligation to gen-        for their owners, that is, for
                                                                                                                                             the education, financial, tax and telecom-    erate value for their owners, that is, for all   all Mexicans.
                                                                                                                                             munications reforms, the transforma-          Mexicans. To achieve that aim, their inter-
                                                                                                                                             tion of the energy sector will further the    nal structure was modernized to resemble
                                                                                                                                             dynamic performance of all the country’s      that of energy companies in their field, with
                                                                                                                                             production forces, bringing greater pros-     a professional management board and the
                                                                                                                                             perity to the population as a whole.          flexibility to partner with third parties, to
                                                                                                                                                 Regarding institutions, greater pow-      manage their budgets autonomously and
                                                                                                                                             ers are given to the Ministry of Energy       seize the business opportunities they deem
                                                                                                                                             (SENER) and to the energy regulatory          appropriate. The State is no longer a man-
                                                                                                                                             bodies such as the National Hydrocarbon       ager but an owner.
                                                                                                                                             Commission (CNH) or the Energy Regula-            As a result of Round Zero –process by
                                                                                                                                             tory Commission (CRE). National energy        which the State granted Pemex the fields
                                                                                                                                             control centers are also created to encour-   for which it proved to have financial,
                                                                                                                                             age competitive natural gas and electricity   technical and execution capabilities– Pe-
                                                                                                                                             markets (Cenagas and Cenace), as well as      mex received 20,589 million barrels of oil
                                                                                                                                             an independent regulator called the Na-       equivalent (MMboe) in proven and prob-
                                                                                                                                             tional Industrial Security and Environmen-    able reserves (2P), enough to guarantee

                                     THE NEW MEXICAN
                                     ENERGY MODEL
                                     On August 12, 2013 the Mexican government announced its constitutional
                                     Energy Reform initiative to attract investment and modernize the
                                     energy sector. After more than 14 months of open debate, the design
                                     and institutional framework stage of the Energy Reform was concluded
                                     last October 31 with the publication of the operational rules of the new
                                     legislation and institutions of the energy sector.
                                      by the ministry of energy

                                         This comprehensive Energy Reform            tainability and environmental protection,
                                     aims to boost economic growth, promote          and 6) maximizing the State’s revenue for
                                     social development and take care of the         the Nation’s long-term development.
                                     environment, enhancing the country’s                Mexico now has a modern energy
                                     competitiveness and increasing its produc-      model. The hydrocarbons sector allows
                                     tion and industrial capacity. The design        private investment in the exploration and
                                     of the new energy model was based on            exploitation of hydrocarbons, in the pro-
                                     international experience and best prac-         cessing, transport and storage of hydro-
                                     tices, as well as on six basic principles: 1)   carbons, petroleum products and petro-
                                     hydrocarbons in the subsurface belong to        chemicals, as well as in distribution and
                                                                                                                                    archive

                                     the nation, 2) free market access and di-       marketing. In the power sector, private en-
                                     rect and fair competition amongst State-        terprises can now invest in the generation
                                     owned enterprises and private companies,        and supply of electricity and, on a contract
                                                                                                                                     photo

                                     3) strengthening of regulatory bodies, 4)       basis, in the expansion and modernization
                                     transparency and accountability, 5) sus-        of the transmission and distribution grids.

18                                                                                                                  November 2014             November 2014                                                                                                                         19
Negocios ProMéxico | Cover Feature                                                                                      photo   archive                                                                                                                                              Cover Feature | Negocios ProMéxico

                                                                                                                                                     operation, approve the exploration and                     The expected investment for this first                  called upon to take a leading role, either
                                                                                                                                                     development plans and authorize the sur-                   round, including Pemex’s farm-outs, is                  as service providers, international busi-
                                                                                                                                                     face exploration and drilling of explor-                   estimated at more than 12.6 billion USD                 ness partners or operators. The State is
                                                                                                                                                     atory wells. The Ministry of Economy                       per year, that is, 50.5 billion USD over the            working to build thorough public poli-
                                                                                                                                                     (SE) will monitor compliance with local                    2015 – 2018 period.                                     cies that will create a national energy
                                                                                                                                                     content goals, while the ANSIPA will be                         The tendering of the different types               industry and stimulate the emergence of
                                                                                                                                                     responsible for the oversight of industri-                 of areas will be staggered throughout                   production chains and high-paying jobs,
                                                                                                                                                     al safety and environmental protection.                    2015. The terms and conditions for shal-                as has already happened in other indus-
                                                                                                                                                     Finally, all public revenue, other than                    low waters will be published in the first               tries such as automotive and aerospace.
                                                                                                                                                     taxes, from hydrocarbons exploration                       two weeks of November, followed by ex-                      In designing the legal framework for
                                                                                                                                                     and extraction activities will be managed                  tra heavy oil in the first half of December.            the operation of the Mexican energy sec-
                                                                                                                                                     by the Mexican Petroleum Fund.                                  In the case of Chicontepec and uncon-              tor, priority was given to adhering to in-
                                                                                                                                                          On August 13, an initial approxima-                   ventional resources, the terms and condi-               ternational best practices. One of the ad-
                                                                                                                                                     tion of the blocks that will be offered up                 tions are expected to be published in the               vantages of being among the last coun-
                                                                                                                                                     for bidding as part of Round One was                       first half of January 2015, whereas those               tries to open up to private investment is
                                                                                                                                                     announced to the public. From the geo-                     of onshore and deep-waters will be pub-                 the opportunity to learn from previous
                                                                                                                                                     logical information available, 169 blocks                  lished in the first two weeks of February               experiences, both positive and otherwise.
                                                                                                                                                     with high resource potential were iden-                    2015 and March 2015, respectively. The                  With the guidance of the State and strict
                                                                                                                                                     tified –60 of them can be classified as                    first contracts are expected to be awarded              transparency rules, the participation of
                                                                                                                                                     development or extraction blocks while                     between June and September 2015, so that                private investment will inject dynamism
                                                                                                                                                     109 of them as exploration blocks.                         by the end of next year, the Energy Reform              to an industry that had been closed off
                                                                                                                                                          The first approximation to Round                      will be yielding its first results in terms of          for decades. With this new energy mod-
                                                                                                                                                     One includes shallow water blocks, un-                     hydrocarbon production.                                 el, Mexico will be able to ensure energy
                                                                                                                                                     conventional fields, and deep water. The                        This reform opens up important busi-               supply for the development and competi-
                                                                                                                                                     goal of this diversity is to attract com-                  ness opportunities for both local and for-              tiveness of the national economy for de-
                                                                                                                                                     panies of different sizes and specialties.                 eign investors. Mexican companies are                   cades to come. N

                                                                                                                                                                                                                                                       Exploration             Pemex
                                                                                                                                                                                                                                                       (Prospective            Farm-0uts             Extraction
                                                                                                                                                                                                                                                       resources)              (2P Reserves)         (2P Reserves)
           Mexico now has a modern          15.5 years of production at the current        activities through contracts with private
     energy model. The hydrocarbons         rate. This figure represents 100% of the       companies, state productive enterprises or                         Blocks                            Surface                                                               4yr estimated                 Annual
                                                                                                                                                                                                                                   Volume*
                                            company’s requested reserves and 83%           partnerships between the two. The design                           (Number)                          (Km2)                              Total: 183                         investment**                  estimated
      sector allows private investment      of the nation’s 2P reserves; the remaining     of the contractual process provides for the                                                                                                                                                              investment**
                                                                                                                                                              Total: 183                     Total: 29,112                                                       Total: 50,500
                 in the exploration and     17% of 2P reserves are available for future    participation of different agencies in order
                                                                                                                                                        109                              25,903                               14,606                        19,000                                  Total: 12,625
                                            bidding rounds.                                to maintain an institutional framework of
        exploitation of hydrocarbons,                                                                                                                                                                                                                                                          4,750
                                                 Regarding prospective resources, Pe-      checks and balances.
           in the processing, transport     mex received 21% of the nation’s total             SENER will be in charge of the selec-
         and storage of hydrocarbons,       and 67% of what it asked for. These en-        tion of the areas that will be up for bid,                                                                                                                                                                4,100
                                            titlements guarantee Pemex’s solid plat-       the design of the contracts and the bidding                                                                                                                                16,400
               petroleum products and       form to meet the new scheme of competi-        guidelines. The kind of contract will be de-
          petrochemicals, as well as in     tion, while the State ensures a minimum        cided based on the type of resources in the                                                                                                                                                                       3,775
           distribution and marketing.      production level. Pemex will be able to        bidding areas and following international
                                            participate in later bidding rounds on an      best practices.                                                                  60                                                                                                 15,100
           In the power sector, private     equal ground with other bidders. Pemex             The Ministry of Finance and Public
     enterprises can now invest in the      also has the possibility to request the mi-    Credit (SHCP) will be in charge of defin-
                 generation and supply      gration of its entitlements to contracts,      ing the fiscal terms and awarding vari-
                                            and of forming partnerships. In the inter-     ables. In the interests of transparency
                 of electricity and, on a   ests of transparency and suitability, the      and in order to minimize discretional ac-
                                                                                                                                                                                                             2,597                             3,782
                   contract basis, in the   selection of its partners in these farm-outs   tions, the awarding variables will be emi-
                                            will be the result of an international pub-    nently economic, and could be payment
        expansion and modernization
                                            lic bid conducted by the CNH. Until now,       to the government, a work commitment                                                                                                        1,557
                     of the transmission    the company has announced its intention        beyond the minimum or a combination                                    141                                612
                                                                                                                                          oldemar

                 and distribution grids.    to migrate 14 fields grouped into ten con-     of both.
                                            tracts, with total estimated 2P reserves of        The bidding processes, including
                                            1,557 MMboe.                                   awarding and signing of the contracts on
                                                                                                                                           graphic

                                                 Besides Pemex’s entitlements, the State   behalf of the State, will be performed by
                                            will conduct exploration and extraction        the CNH, which will also supervise their                  *Million Barrels of Oil Equivalents / **Million  / 1In 10 contracts

20                                                                                                                        November 2014              November 2014                                                                                                                                                   21
Negocios ProMéxico | Business Tips                                                                                        photo archive                                                                                                                 Business Tips | Negocios ProMéxico

Mexico and Renewable                                                                                                                           Mexico can achieve the goal it has set itself by increasing
                                                                                                                                                                                                                                                Mexico can achieve the goal it has

Energy Generation                                                                                                                              wind power alone. However, it is expected that as part of
                                                                                                                                                                                                                                           set itself by increasing wind power alone.
                                                                                                                                                                                                                                           However, it is expected that as part of that
                                                                                                                                               that goal, it will also enjoy a boost to power generation                                   goal, it will also enjoy a boost to power
                                                                                                                                                                                                                                           generation from other renewable sources.
With a strong commitment to the development of renewable energies, Mexico is seeking to meet its energy needs                                  from other renewable sources.                                                                    Geothermal energy, for example,
and at the same time display global responsibility by contributing to the reduction of emissions responsible for the                                                                                                                       presents low relative costs. If geothermal
greenhouse effect.                                                                                                                                                                                                                         resources are achieved equivalent to the
                                                                                                                                                                                                                                           quality of steam deposits found to date,
 by maría cristina rosas   *                                                                                                                                                                   While developed countries have energy       geothermal generation could amount to
                                                                                                                                                                                          policies that favor renewable sources, a         2.3% of total capacity by 2026. Today,
In the early 19th century, 95% of the                                                                                                                                                     growing trend is also observed in emerging       Mexico is the fourth largest producer of
primary energy consumed in the world                                                                                                                                                      economies to promote their development.          electricity from geothermal energy, behind
came from renewable sources. A century                                                                                                                                                    To date, 95 developing countries have pro-       only the US, the Philippines and Indonesia.
later, that percentage had fallen to 38%                                                                                                                                                  posed promotion of clean energy genera-               There is already an initiative of public
and at the beginning of this century it                                                                                                                                                   tion technologies.                               and private bodies in place to set up three
stood at just 16%. That trend seems to                                                                                                                                                         The list of the five leading countries in   research consortia for renewable technolo-
be reversing, as in many industrialized                                                                                                                                                   energy generation from renewable sources is      gies allocated through the Sustainable En-
countries the proportion of renewable                                                                                                                                                     headed by China, a country which is respon-      ergy Sector Fund, aimed at identifying and
energy has grown considerably in the                                                                                                                                                      sible for 24% of renewable capacity world-       supporting the country’s capabilities for
last two decades.                                                                                                                                                                         wide. In 2013, for the first time, the energy    expanding energy generation, with the em-
    Global investment in renewable en-                                                                                                                                                    derived from hydropower, photovoltaic and        phasis on geothermal energy.
ergy has grown dramatically: in 2004 it                                                                                                                                                   wind sources exceeded that produced from              In that regard, the Transmexican volca-
was 22 billion USD, rising to 130 billion                                                                                                                                                 fossil fuels and nuclear energy in this coun-    nic axis has been identified as a priority area
USD in 2008, 160 billion USD in 2009,                                                                                                                                                     try. The US is in second place, followed by      crossing the country transversely from Co-
and 211 billion USD in 2010. About half                                                                                                                                                   Brazil, Canada and Germany.                      lima to the borders of Puebla and Veracruz
of the estimated 194 gigawatts (GW)                                                                                                                                                            Throughout this decade, the falling         states with significant areas of thermal activ-
of new electricity capacity in the world                                                                                                                                                  cost of technologies that make use of re-        ity, whose development may help establish
in 2010 was renewable energy. In early                                                                                                                                                    newable energy sources has led to high           Mexico’s position as one of the largest gen-
2011, at least 118 countries had policies                                                                                                                                                 growth rates in manufacturing, particu-          erators of geothermal energy on the planet.
in place to support renewable energy or                                                                                                                                                   larly in solar photovoltaic technology but            Meanwhile, as reported by the Euro-
some kind of national goal or quota, well                                                                                                                                                 also wind power and biofuel production.          pean Photovoltaic Industry Association
above the 55 countries that had such                                                                                                                                                           Mexico made a commitment to reduce          (EPIA), Mexico is among the three most
policies in 2005.                                                                                                                                                                         GHG emissions by 30% by 2020 and                 attractive countries in the world to invest
    The growing interest in renewable                                                                                                                                                     50% by 2050, according to the Climate            in photovoltaic projects. States like So-
energies is due to several factors. First,                                                                                                                                                Change Law passed in June 2012, in order         nora, Chihuahua, Durango and Baja Cali-
these energy sources contribute to reduc-                                                                                                                                                 to comply with the provisions agreed at          fornia have the land area and potential for
ing greenhouse gas (GHG) emissions.                                                                                                                                                       the United Nations (UN) and in the Kyoto         installing electricity-generating capacity
They also reduce energy dependence and                                                                                                                                                    Protocol, where the country voluntarily          using solar concentration fields. Similarly,
contribute to job creation and techno-                                                                                                                                                    imposed a reduction in the use of fossil         the levels of solar radiation along the Pa-
logical development. The arguments in                                                                                                                                                     fuels for electricity generation of 65% by       cific coast and the states in the northeast-
favor of renewables have been endorsed                                                                                                                                                    2024, 60% by 2035 and 50% by 2050. In            ern region permit further expansion of so-
by numerous analyses and are supported                                                                                                                                                    addition, Mexico has set a goal of gener-        lar panel installations in the country.
by major international institutions. As                                                                                                                                                   ating 35% of power in the country from                Thus the outlook for renewables is ex-
environmental sustainability policies be-                                                                                                                                                 renewable sources by 2024. In that regard,       tremely promising. According to informa-
come consolidated around the world, it                                                                                                                                                    numerous opportunities are emerging in           tion from ProMéxico, from 2008 to date
is necessary for countries to include envi-                                                                                                                                               the area, to which the recent energy reform      it has attracted 47 multiyear green invest-
ronmental impact studies in their devel-      •   Emissions reduction.                         Unlike hydrocarbons, renewable ener-            The energy generated by renewable          must be added.                                   ment projects from abroad –mostly in the
opment plans, which inevitably leads to       •   Economically viable and abundant.        gies are inexhaustible. For example, the sun    sources worldwide grew 8.3% in 2013, rep-           Under the National Energy Strategy          wind sector– totaling more than 8.2 bil-
increased use of renewables.                  •   Forms of energy that are close to con-   produces 2,850 times more energy than is        resenting 22% of total energy production.      2012-2026, the Special Program for the           lion USD and more than 4,950 new jobs.
    The use of renewable energy brings            sumers.                                  needed in the world today; wind energy has      Meanwhile, jobs in the sector increased 14%    Development of Renewable Energies, pro-          According to ProMéxico, the renewable
with it several advantages, which in-         •   Promotion of an intelligent cycle of     the potential to meet that goal 200 times;      to 6.5 million. According to the Renewable     grams on bioenergy, the Program for the          energy sector receives the second highest
clude:                                            production, consumption and distri-      biomass 20 times; geothermal five times;        Energy Policy Network for the 21st Century     Promotion of Solar Water Heaters in Mex-         amount of confirmed investment, exceeded
• An increase in supply and the amount            bution.                                  waves and tides trice, and hydropower once.     (REN21), in 2013, the world developed re-      ico (Procalsol) and the wider evolution of       only by the automotive sector. N
    of energy, enabling countries to meet     •   Use of locally available energy re-      According to the Research Association for       cord power generation capacity from renew-     the energy market in the coming years, we
    their socio-economic needs.                   sources, meaning they are friendly       Solar Power, the solar radiation that reaches   able sources of 1,560 GW, meaning that now     can expect an expansion of the infrastruc-       *Professor and researcher in the Political and
• Renewability and sustainability of re-          to the environment and can promote       Earth in a single day holds enough energy to    more than a fifth of world energy production   ture using renewable energy to generate          Social Sciences Faculty, National Autonomous
    sources.                                      community development.                   meet current demand for eight years.            comes from renewable sources.                  electricity, heat and biofuels in the country.   University of Mexico (UNAM).

22                                                                                                                        November 2014    November 2014                                                                                                                               23
Negocios ProMéxico | Figures                                                                                                                               infographic    oldemar                                                                                                                                                              Figures | Negocios ProMéxico

     A BRIGHT FUTURE
     Renewable energy in Mexico

     Mexico has an enormous                              That is almost                  It is expected that by                          The regions with the greater                   Average daily solar                         Mexico is part of the                     Mexico has the potential                                    Mexico has the largest
     capacity to generate electricity                    one quarter of                  2024, 35% of the                                potential for wind energy in                   radiation during the                        "Sun belt", which                         to generate 6,500,000 GWh                                   manufacturing base
     from renewable sources. In                          the country’s                   electricity generated in                        Mexico are the Isthmus of                      year in Mexico is                           means it is among the                     per year from solar energy.                                 of photovoltaic panels
     2013, the country’s installed                       installed                       the country will come                           Tehuantepec (Oaxaca), the                      5.5 kilowatt-hour per                       five most suitable                        That is equivalent to                                       in Latin America,
     capacity to produce energy                          capacity to                     from clean technologies.                        Gulf of Mexico, la Rumorosa                    square meter (kWh/m2),                      countries for the                         approximately 27.6 times                                    with a production
     upon renewable sources was                          generate                        By 2035 that figure will                        (Baja California) and the                      but in some regions it                      development of                            the country’s total consumption                             capacity of over
     14,891 megawatts (MW).                              electricity.                    be 40% and 50% by 2050.                         Yucatán Peninsula.                             may exceed 8.5 kWh/m2.                      photovoltaic projects.                    of electricity in 2013.                                     737 MW per year.

                                                                                     6,000                                                       6,000                                                 6,000                                                          6,000                                                          6,000
             HOW                                                             3,000           9,000                                       3,000           9,000                                 3,000           9,000                                          3,000           9,000                                          3,000           9,000

            MUCH                                                         0                    12,000
                                                                                                                450
                                                                                                                                     0                    12,000
                                                                                                                                                                         2,000
                                                                                                                                                                                          0                     12,000
                                                                                                                                                                                                                             100
                                                                                                                                                                                                                                                         0                     12,000
                                                                                                                                                                                                                                                                                              75
                                                                                                                                                                                                                                                                                                                         0                    12,000
                                                                                                                                                                                                                                                                                                                                                               500

       RENEWABLE                             Installed
                                             capacity                                MW                0              900                        MW                0         4,000                     MW                0         200                                MW                0           150                              MW                    0         1,000
      ENERGY DOES                                                               11,694                          890                          1,638                      3,332                          823                   169                                      661                   120                                      76                        976
           MEXICO
        GENERATE?                            Capacity under
                       MW, 2013              construction                                        Hydro                                                       Wind                                               Geothermal                                                          Biomass                                                          Solar

        Baja California                                                                                      WHERE IS RENEWABLE                                                                                               A GROWING BUSINESS
                                                                                                      ENERGY PRODUCED IN MEXICO?                                                                                              Investment in renewable
                                                                                                                                                                                                                                                                                                                                                               14
                                                                                                                                 Main states with installed                                                                   energy projects in Mexico
        24*     539      570     37                                                                                                                                                                                                                                                                                                                                 2,922
                                                                                                                                          capacity in 2013                                                                    (million , estimated upon investment announcements)

                                                                                                                                                 Stations in operation and                                                             #
        Sonora                                                                                                                                    under construction, MW                                                      NUMBER
                                                                                                                                                                                                                                                                                                                                      7
                                                                                                                                                                                                                              OF PROJECTS                                                                                                                                    2500
                                                                                                                                                                                                                                                                                                                                           2,423
                                                                                                                                                                                        Tamaulipas
        37*       2      386
                                                                                                                                                                                                                                                                                                                    5
                                                                                                                                                                                        500        13                                                                                                                   1,897                                                2000

        Baja California Sur
                                                                                                                                                                                        San Luis Potosí
                                                                                                                                                                                                                                                                                                                                                                             1500
         1      10     136
                                                                                                                                                                                         200       81           33                                                                                  4
                                                                                                                                                                                                                                                                              3             1,000
        Coahuila                                                                                                                                                                                                                                                                                                                                                             1000
                                                                                                                                                                                        Veracruz                                    1                                 874                               4
                                                                                                                                                                                                                              750                                                                           869
        501     33     37
                                                                                                                                                                                        572*       40          268                                                                                                                                                           500
                                                                                                                                                                                                                                                   1
                                                                                                                                                                                                                                             273
        Nuevo León                                                                             Jalisco                                                                                  Oaxaca                                                                    1
                                                                                                                                                                                                                                                             91
                                                                                                                                                                                                                                                                                                                                                                             0

        324    28                                                                               56*        50     66        84                                                          19*      2,707         33            ‘o3          ‘06           ‘07                   ‘08             ‘09             ‘10             ‘11                    ‘12              ‘13

     *Only includes hydroelectric plants with installed capacity of 30 MW or less.                                                                                                                                                                      Sources: Federal Electricity Commission (CFE) / Energy Regulatory Commission (CRE) / FDI Markets.

24                                                                                                                                                                     November 2014   November 2014                                                                                                                                                                                25
Negocios ProMéxico | Mexico’s Partner                                                          photos   courtesy of swiber offshore mexico                                                                                                                 Mexico’s Partner | Negocios ProMéxico

                                        Swiber Offshore México,                                                                               long and 36 inches in diame-
                                                                                                                                              ter –almost the same distance
                                                                                                                                                                                  In less than three years, the company has
                                                                                                                                                                                  invested about 250 million usd in Mexico. In
                                                                                                                                                                                                                                                            savings of up to 100 million
                                                                                                                                                                                                                                                            USD for the client.
                                        The Treasure that Lies                                                                                as the Panama Canal– that
                                                                                                                                              we built under the sea in the       August 2014, Swiber executives announced to
                                                                                                                                                                                                                                                                Mexico has surpassed
                                                                                                                                                                                                                                                            Swiber Offshore’s expectations.
                                        in Mexican Waters                                                                                     area of Campeche.”
                                                                                                                                                  Based on that experience,
                                                                                                                                                                                  the press the firm’s intention to invest about 700                        The future of the firm in the
                                                                                                                                                                                                                                                            country will be linked to the
                                                                                                                                                                                  million usd in the country by 2017, thanks to
                                                                                                                                              Swiber decided to settle its                                                                                  oil and gas industry over the
                                        Having established itself in Mexico, Singaporean company Swiber Offshore has                          strategic offices in Mexico in      the reform in the energy sector implemented by                            next few years, says Villegas.
                                        decided to double its investments over the next five years. The idea is to invest up to               order to expand its opera-          the Mexican government.                                                   “There are great expectations
                                        700 million usd in the Mexican energy sector.                                                         tions to the Americas. Also                                                                                   for the energy reform, especial-
                                                                                                                                              as a reaffirmation of its long-                                                                               ly for Mexico’s future, and we
                                         by antonio vázquez
                                                                                                                                              term commitment, Swiber             that the country has led to big      example, the company man-            are ready to make our contri-
                                                                                                                                              flagged its five vessels with       profits for the company.             aged to put in place a deepwa-       bution. I am pleased with what
                                        Less than three years ago,        Mexicanos (Pemex) the firm        a project that consists in the    the Mexican flag.                        “It is a country with an        ter platform weighing approxi-       Mexico has achieved and the
                                        Mexico was totally unknown        was surprised at what it meant    procurement, transportation,          “A good definition of           excellent geographical posi-         mately 13,000 tons. It did so        changes in the energy industry
                                        to Swiber Holdings Limited, a     to invest in Mexico.              and installation of a pipeline    what the company does is de-        tion but Mexico also has a           by working back-to-front:            that are intended to create a
                                        Singapore company and lead-           With 18 years’ experi-        in the Gulf of Mexico.            veloping offshore fields. Once      well-earned reputation in the        building the infrastructure on       more prosperous and efficient
                                        ing global integrated construc-   ence, more than 2,500 em-             Antonio Villegas, Presi-      various studies have been car-      world, backed up by economic         land and then using a special        industry, as well as making it a
                                        tion and support services pro-    ployees worldwide, and list-      dent of Swiber Offshore in        ried out showing it is ready        policies, and has an excellent       vessel to position it at sea by a    more competitive country,” he
                                        vider to the offshore oil and     ings on the Singapore Stock       Mexico, clearly describes the     to produce, a company like          command of its macroeco-             “float over” method (the plat-       concludes. N
                                        gas industry. After a big proj-   Exchange, Swiber came to          company’s first project in        Swiber comes along to build         nomic indicators. It has signed      form slides over the water and
                                        ect carried out for Petróleos     Mexico in 2012 to work in         Mexico: “A pipeline 77 km         the installations for transport-    free-trade agreements with           is installed). That represented      www.swiber.com
                                                                                                                                              ing the oil from the well to        several countries and has been
                                                                                                                                              land. That was what we did in       a pioneer in the field. For ex-
                                                                                                                                              that first project and what we      ample, it is in negotiations to
                                                                                                                                              continue to do in others with       join the Trans-Pacific Partner-
                                                                                                                                              Pemex,” Villegas says.              ship (TPP), to which Singapore
                                                                                                                                                  Internationally, the firm has   is a party. All that means that
                                                                                                                                              an operating fleet of 51 vessels    Mexico’s business practices
                                                                                                                                              –comprising 38 offshore and         meet global standards,” says
                                                                                                                                              13 construction vessels– in re-     Antonio Villegas.
                                                                                                                                              gions such as Asia-Pacific, Mid-         Following the energy re-
                                                                                                                                              dle East, and Latin America.        form, Pemex will be one of
                                                                                                                                                  In less than three years,       the main customers for Swiber
                                                                                                                                              the company has invested            Offshore in Mexico. Villegas
                                                                                                                                              about 250 million USD in            reveals that the company an-
                                                                                                                                              Mexico. In August 2014,             ticipates the national energy
                                                                                                                                              Swiber executives announced         sector will be one of the most
                                                                                                                                              to the press the firm’s inten-      important markets in the me-
                                                                                                                                              tion to invest about 700 mil-       dium and long term.
                                                                                                                                              lion USD in the country by               “That will be a very im-
                                                                                                                                              2017, thanks to the reform in       portant market for Swiber in
                                                                                                                                              the energy sector implemented       the next five years; it is a ques-
                                                                                                                                              by the Mexican government.          tion of combining the energy
                                                                                                                                                  “Our attention has been         reform with other factors.
                                                                                                                                              focused mainly on the Mexi-         Pemex is a very productive
                                                                                                                                              can market but we also want         business […] and the idea is to
                                                                                                                                              to explore in Colombia and          establish capital investment of
                                                                                                                                              we are looking at other op-         about 700 million USD, with
                                                                                                                                              portunities in the region,          larger modern fleets working
                                                                                                                                              including the Caribbean coun-       offshore. A feature of our fleet
                                                                                                                                              tries, Peru, Argentina, and         is that it is made of vessels no
                                                                                                                                              Venezuela, virtually all Latin      more than five years old and
                                                                                                                                              American countries, and we          that gives it a special value,”
                                                                                                                                              are even thinking of the US,”       Villegas said.
                                                                                                                                              Villegas adds.                           The technological and
                                                                                                                                                  Entering Mexican waters         innovation component is im-
                                                                                                                                              was no accident for Swiber          portant for a company like
                                                                                                                                              Offshore. Villegas explains         Swiber Offshore. In India, for

26                                                                                                                            November 2014   November 2014                                                                                                                                  27
Negocios ProMéxico | Mexico’s Partner                                                                          photos   courtesy of 3tek solar                                                                                                             Mexico’s Partner | Negocios ProMéxico

                                                                                                                                                      At the Plantronics plant,
                                                                                                                                                  the 1.16 MW photovol-
                                                                                                                                                  taic system was installed
                                                                                                                                                  with 4,300 solar modules
                                                                                                                                                  occupying an area the size of
                                                                                                                                                  two soccer fields. With such
                                                                                                                                                  a large-capacity system, the
                                                                                                                                                  Plantronics installation can
                                                                                                                                                  generate close to 2 GW hours
                                                                                                                                                  of clean energy per year, which
                                                                                                                                                  is equivalent to an annual re-
                                                                                                                                                  duction in emissions of 1,360
                                                                                                                                                  tons of carbon dioxide (CO2).
                                                                                                                                                      “Nationally, I know of no
                                                                                                                                                  other company that has inte-
                                                                                                                                                  grated a roof-top solar system
                                                                                                                                                  on par with our Plantronics
                                                                                                                                                  installation,” says the director
                                                                                                                                                  of 3Tek SOLAR.

                                                                                                                                                  Full Service
                                                                                                                                                  3Tek SOLAR competed with
                                                                                                                                                  US companies to win the bid        3Tek SOLAR competed with US companies to win the                       and replicate effective prac-
                                                                                                                                                  for the huge development           bid for the huge development at Plantronics. Once it                   tices. Given current economic
                                                                                                                                                  at Plantronics. Once it had                                                                               conditions, in which interest in
                                                                                                                                                  secured the contract, the com-     had secured the contract, the company leveraged its 20                 green energy and the benefits
                                                                                                                                                  pany leveraged its 20 years of     years of experience in design and implementation of                    of the transitioning to them
                                                                                                                                                  experience in design and im-                                                                              is quickly spreading, 3Tek
                                                                                                                                                                                     construction projects in the industrial and commercial
It’s Time to Turn and Face the Sun                                                                                                                plementation of construction
                                                                                                                                                  projects in the industrial and     sectors operating as Tri Tektura.
                                                                                                                                                                                                                                                            SOLAR is collaborating with
                                                                                                                                                                                                                                                            ProMéxico to plan new paths
                                                                                                                                                  commercial sectors operating                                                                              for further expansion.
                                                                                                                                                  as Tri Tektura. Additionally,                                                                                  “Business leaders are going
3Tek SOLAR, Inc. recently designed and installed the largest and most ambitious self-supply rooftop solar                                         3Tek SOLAR provided its ex-                                                                               to realize that they should not
project in Mexico. Such an achievement is the optimal platform from which to lead and revolutionize the                                           pertise acquired over five years   times throughout the day, and      power generation data anytime       miss out on taking advantage
country’s adoption of green energy.                                                                                                               in power-needs analysis, and       how it would interconnect          during the day, how much is         of the sun and the free, clean
                                                                                                                                                  integration of alternative en-     with the electricity grid. Fur-    being produced, and what the        energy it provides. Further-
 by omar magaña                                                                                                                                   ergy generation technologies.      ther consideration was given       average amount of generation        more, the openness to renew-
                                                                                                                                                      “We developed a complete       to analyzing the best options      will be for a given period.         able energy is now clearly
On September 27, 2014 the               entrepreneurs: self-supply         ergy produce immediate and         analysts, that is a very good       EPC turnkey package: engi-         for monitoring the system                                              defined in local and national
first gigawatt was generated            power generation from re-          tangible results and that com-     number, if not a great one,”        neering; materials and equip-      once it was in operation.          Shifting the Paradigm               regulations. As part of that
by 3Tek SOLAR’s sizeable                newable sources. According         panies who are committed to        says Montoya.                       ment procurement; permitting;          For the execution of the       “There is a new mindset and         openness, a tax benefit has
photovoltaic installation on            to the company, this is the        the idea will see marked sav-           Systems that capture solar     and system construction,”          work, approximately 100 peo-       culture to be developed in          been established that will pro-
the Plantronics factory that            ideal moment to invest in          ings in their operating costs.     radiation and convert it into       Montoya recalls.                   ple were hired for the better      Mexico,” says Héctor Mon-           mote the growth of this sector
manufactures telecommunica-             renewable energy and see the           When Plantronics commis-       electricity allow companies to          During the prospecting         part of a year. According to       toya. From his point of view,       as well as the company itself,”
tions components in Tijuana,            immediate financial and envi-      sioned 3Tek SOLAR to devel-        fix resource costs at current       stage, it was necessary to         Montoya, “the staff was well       Plantronics broke away from         said Montoya.
Baja California –serving as a           ronmental benefits of energy       op their photovoltaic energy       prices over the long term.          think about the location of        trained to carry out a project     deep-seated beliefs in Mexico            “Broader adoption of re-
70% self-sufficient clean en-           self-sufficiency.                  system, its long-term goal was          According to 3Tek SO-          the solar power installation       of this magnitude with the         about the reliability of alter-     newable energy systems may
ergy producer.                              Héctor Montoya, Director       to maintain constant savings       LAR, the average lifetime of        from the viewpoint of the          expected quality standards, on     native energy systems. This         take some time, however it is a
     For 3Tek SOLAR, the                of 3Tek SOLAR, emphasizes          of 70% of its current energy       photovoltaic modules is over        local geographical and spatial     time, and within budget.”          highly successful giant step        process that we are excited to
company responsible for the             that the considerable cost-        consumption, remarks Mon-          30 years, based on the manu-        elements. A basic premise of           The technology providers       forward has served to trigger       be a part of and to take a lead-
design and implementation of            savings exhibited by the moni-     toya. He recalls a phrase used     facturers’ own standards.           Hector Montoya is that in-         were hired in the US, while the    and expand new economic             ing role in. Together with inno-
the project –the largest of its         toring system in the Plantron-     often by executives in the solar   Moreover, since the systems         dustrial building design is all    wiring and support systems         opportunities and establish an      vative industrial leaders such as
kind in the private sector in           ics photovoltaic installation      industry in relation to cost       have no moving parts, main-         about maximizing long-term         contracts were allocated to        area of expertise in the solar      Plantronics and skilled solar in-
Latin America– this is more             should clear away any doubts       reductions from renewable          tenance costs are minimal.          operations by reducing energy      local businesses. The advanced     industry in Mexico.                 tegrators like 3Tek SOLAR, we
than good news. It is a testa-          or myths about alternative         energy investing: “Going green     Therefore, an investment in a       costs and managing natural         monitoring system was com-             3Tek SOLAR markets              will most certainly consolidate
ment to the effectiveness and           energy generation. The signifi-    makes you green (dollars).”        solar energy system generally       resources. So, for the Plan-       missioned from a US company        itself as a company that bases      its success throughout Mexico,”
value of what 3Tek SOLAR                cant results in projects such as       “In most cases, the in-        pays for itself eight to nine       tronics project it was necessary   that provides the service over a   its work on high standards of       he concludes. N
has promoted over the last              this one, clearly demonstrate      ternal rate of return is in        times over the course of its        to assess how optimal energy       five-year period. This enables     quality, safety and sustainabil-
five years among Mexican                that investments in solar en-      excess of 14%. For financial       lifetime.                           would be produced, at what         the customer to obtain real-time   ity –a company able to provide      www.3teksolar.com

28                                                                                                                                November 2014   November 2014                                                                                                                              29
Negocios ProMéxico | Mexico’s Partner                                                              photos   courtesy of gamesa                                                                                                               Mexico’s Partner | Negocios ProMéxico

Gamesa
                                                               by omar magaña                                                          According to information
                                                                                                                                  from the firm, Gamesa has in-

Remains a Reference                                           The largest manufacturer of
                                                              wind turbines in Spain, one
                                                                                               generation capacity of up to
                                                                                               500 MW in the state of Oaxa-
                                                                                                                                  stalled more than 30,000 MW
                                                                                                                                  in 45 countries and manages
Point                                                         of the top five manufacturers
                                                              worldwide and one of the
                                                                                               ca over the next three years.
                                                                                                   “We aim to establish a
                                                                                                                                  the operation and maintenance
                                                                                                                                  of about 19,500 MW. As a
                                                              most important firms in the      clear position in Mexico           developer and builder of wind
Recent announcements by Gamesa in Mexico point to its         development of wind proj-        and to continue working in         farms, it has installed 6,400
continued and growing involvement in a market where           ects worldwide, Gamesa is        the other economies in the         MW and has a portfolio of
it has set itself clear goals ahead of the growing need for   committed to maintaining its     region while maintaining a         16,300 MW at varying stages
energy from renewable sources.                                leadership in Mexico, where      strong presence in them: this      of development.
                                                              it is investing heavily in the   is an aggressive but feasible           In Mexico, the company
                                                              renewable energy sector and,     growth plan,” says Hipólito        has installed around 1,400
                                                              as a result, has become the      Suárez.                            MW and performs operation
                                                              nerve center of operations for       Following a period outside     and maintenance services
                                                              Gamesa in Latin America.         the corporation, which he was      for a further 1,000 MW. As
                                                                   Among the recent an-        part of for 15 years, Suárez       a developer it has built 244
                                                              nouncements by the company       returned in 2013 as Deputy         MW and has a large portfolio
                                                              in the country, in addition to   Director for Mexico and Latin      under development.
                                                              the designation of Hipólito      America. Upon his return,               For Suárez there is no
                                                              Suárez as CEO, of note is the    he acknowledges, he found a        doubt about Gamesa’s leading
                                                              partnership with Santander       company “with a more diversi-      position in the country and
                                                              bank for the development of      fied position and greater inter-   future dominance in a market
                                                              wind power projects with a       national presence.”                that will place greater empha-
                                                                                                                                  sis on clean energy over the
                                                                                                                                  next decade.                        Among the recent announcements by the company in the country, in
                                                                                                                                       “It depends on who you         addition to the designation of Hipólito Suárez as CEO, of note is the
                                                                                                                                  ask but overall the commitment
                                                                                                                                  to renewable energy in Mexico       partnership with Santander bank for the development of wind power
                                                                                                                                  is strong. The goal set by the      projects with a generation capacity of up to 500 MW in the state of
                                                                                                                                  Ministry of Energy (SENER)
                                                                                                                                                                      Oaxaca over the next three years.
                                                                                                                                  in 2014 is that 35% of energy
                                                                                                                                  produced in the country should
                                                                                                                                  come from renewable sources.        separate administration within     energy more efficiently from         demand; 2) regulatory stability:
                                                                                                                                  Then there is the Special Pro-      Gamesa– Mexico is recognized       the sun, water, and wind.            “We sense it will be a market
                                                                                                                                  gram for Renewable Energy,          as the largest market in Latin         “We have a presence              with significant legal certainty
                                                                                                                                  which sets a target of 8,700        America and as a result the        across the value chain: we           and that is a great foundation
                                                                                                                                  MW of installed capacity of         corporation has a special fo-      develop our own projects, we         on which to take forward en-
                                                                                                                                  wind power by 2017, which           cus on the country and, from       supply the machines –a niche         ergy projects in general,” says
                                                                                                                                  would be around 5,200 MW            there, on strategies for Central   in which we are also leaders–        Suarez, and 3) local capacity
                                                                                                                                  more than currently installed,      and South America.                 and we provide maintenance.          for the generation of suppliers
                                                                                                                                  according to annual estimates                                          In one way or another, our           that the sector requires.
                                                                                                                                  of installed wind capacity es-      Maintaining                        understanding of the entire              In relation to that last
                                                                                                                                  tablished in the program itself,”   the Differentiating                value chain provides us with a       point, Hipólito Suárez reveals
                                                                                                                                  says Suárez.                        Factors                            benefit,” says Suárez.               that Gamesa is locating sup-
                                                                                                                                       To get an idea of the im-      Gamesa is a corporation that           “In the case of Mexico, we       pliers of components for their
                                                                                                                                  portance of wind energy in the      develops solutions for the         have additional benefits due to      wind turbines in Mexico. As
                                                                                                                                  renewables mix, the same pro-       field of renewables: it manu-      our proximity to customers and       regards wind farm construc-
                                                                                                                                  gram sets a target of 483 MW        factures and markets its own       our flexibility. In addition, our    tion projects in the country,
                                                                                                                                  of installed solar energy capac-    turbine models on 2-2.5 MW         agreement with Santander for         Gamesa is working with Mexi-
                                                                                                                                  ity for 2017, while installed       and 5 MW platforms, in ad-         the development of 500 MW            can suppliers of engineering,
                                                                                                                                  capacity for geothermal power       dition to those in the offshore    in the Oaxaca area puts us in a      civil engineering, and electrical
                                                                                                                                  should reach 962 MW. Only           division for coastal water         very good position,” he adds.        work. The latter, according
                                                                                                                                  generation from hydro power         applications; it promotes,             What lies on the horizon         to Suárez, has involved the
                                                                                                                                  tops wind, with a projected         develops and sells wind farms,     as a result of the energy reform     recruitment of a thousand
                                                                                                                                  installed capacity of 12,551        including their operation and      in Mexico? Suárez highlights         people working on parallel
                                                                                                                                  MW by 2017.                         maintenance and invests in         three characteristics of the         construction projects. N
                                                                                                                                       On that basis –leaving         researching and designing          emerging scenario: 1) a large
                                                                                                                                  aside Brazil, which has a           technologies that will produce     market in terms of electricity       www.gamesacorp.com

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