Although substantial energy reform remains elusive in Mexico, a number of recent signposts are signaling a push for change. As markets tighten and costs continue to rise, project development and growth along the energy value chain become more challenging for both public and private entities. Mexico ’s oil production decline and limited reserves replacement are symptomatic of a sector in need of investment and demonstrate the difficulties associated with more geologically and technically complex resources. Investment decisions on gas transportation and power infrastructure projects must be made in the context of rising capital costs, scarce public funding, uncertainty about future regulatory changes, and increased energy demand globally. The dual drivers of domestic constraints to growth and global pressures could finally spur long-delayed decisions on energy reform and public finances policies which could have a material impact on the type and quality of business opportunities that Mexico can offer to investors.

CERA will analyze the potential impact of these change drivers on emerging and future development options for exploration and production, natural gas transportation, and independent power producer (IPP) opportunities. We will address how the evolution of contractual terms, regulatory framework, supply-demand fundamentals, and economic and political conditions have varying implications for risk-reward parameters and call for differentiated strategies across the value chain.