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Mexico - Hasta Luego, till we meet again
September 21, 2014, 2:01 pm
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His Excellency Luis Alberto Barrero Stahl

H.E. Luis Alberto Barrero Stahl, the first resident Ambassador of Mexico to Kuwait will leave the country at the end of September on completion of his successful tenure here. Ambassador Luis, as he is fondly known in diplomatic and government circles, has created a favourable and lasting impression of his country in Kuwait.

A career diplomat with 34 years of experience and also an intellectual, Ambassador Barrero Stahl has an impeccable and distinguished record as a diplomat. He leaves an indelible impression with his warmth and friendly disposition.  In the three years of representing Mexico he has accomplished his task admirably and efficiently.

Speaking to The Times Kuwait from his office, overlooking the Arabian Gulf, Ambassador recounted the early days of his tenure here and the success story of Mexico in the economic and political field.

“Let me begin by conveying the warmest congratulations to H.H. the Amir Sheikh Sabah Al Ahmad Al Sabah and people of Kuwait from the president and people of Mexico for receiving the award as Humanitarian Leader by the United Nations,” Ambassador Barrero Stahl stated.

The first Mexican embassy was officially opened in Kuwait in January 2012 after almost 36 years of diplomatic relations between the two countries. This was possible with the active support and collaboration of the Kuwaiti foreign ministry, and also the special initiative of H.H. Sheikh Nasser Al Ahmad Al Sabah, the former prime minister of Kuwait, he pointed out.

During his tenure many agreements were signed including the avoidance of double taxation, joint committee meetings and waiver of visas for diplomatic passport holders. The visit of the Mexican foreign minister in March was also a significant boost to the relationship.

Pointing at the uniqueness of the two countries, Ambassador Barrero Stahl reiterated the enormous goodwill and friendly relations between the two nations. He reiterated that the reciprocal opening of embassies in both countries during the past three years has allowed both countries to build up bilateral contacts and tap the potential of their relations.

Speaking extensively about the Mexican Structural Reform Agenda, Ambassador Barrero Stahl said Mexico was well prepared for the challenges they were facing and were ready to play with a total openness and goodwill to engage and participate with all countries.

Over the past three decades Mexico has transitioned successfully to an electoral democracy and has opened its economy, creating competitive industries. However, economic growth had remained below its potential largely due to the fall in productivity.

Eleven (11) structural reforms have been carried out which required 58 constitutional changes, amendments to 81 laws, the creation of 21 new laws and the abolishment of 15.

The eleven (11) structural reforms in less than 2 years since President Enrique Pena Nieto took office are the following:  Six Reforms to increase productivity in all sectors and regions: 1. Labor Reform 2. Anti-trust and Competition Reform 3. Fiscal and Social Security Reform 4. Financial Reform 5. Telecommunications Reform 6. Energy Reform. Three reforms to strengthen and expand the rights of Mexican citizens: 7. Education Reform 8. New Law of ‘Amparo’ (legal injunction or constitutional challenge) 9. Issuance of a National Code of Criminal Procedures 2 Reforms to reinforce democracy and freedoms:10. Political-Electoral Reform 11. Transparency Reform

Energy Reform: why was it necessary?

Oil and gas

Since Mexico entered NAFTA (1994), productivity growth in the tradable sector has been significantly greater than that of the non-tradable sector, including oil and gas

Despite being in an energy rich country, Pemex did not always have the sufficient technical, financial and administrative capacities to extract by itself non-conventional hydrocarbons, which will be the main source of oil production in the future.

Previously, Pemex was legally bound to carry out, on its own, all the activities related to the oil industry, regardless of any financial, operational or technological limitations. Under these conditions, Pemex naturally concentrated on the more profitable business: the exploration and production of oil.

The energy reform reaffirms the national ownership of hydrocarbons and the State’s role in the energy industry. It is a new scheme for public and private investment in exploration and extraction of hydrocarbons is established, through which the Federal Government may assign Pemex current production fields and additional exploration areas to be developed where Pemex demonstrates to have the technical, financial and administrative capacities to develop them in an efficient and competitive manner (Round Zero). Pemex could exploit these fields alone or in association with third parties.

The Federal Government also may assign contracts to Pemex or private companies through a competitive bidding process. The contracts will be awarded to the participant that offers the most favorable economic conditions for the State. This strengthens the energy sector governance by creating new bodies: Mexican Petroleum Fund for Stabilization and Development (MPFSD), the National Agency for Industrial Security and Environmental Protection of the Hydrocarbon Sector (NAISEPHS) and the National Center for Control of Natural Gas.

A new institutional arrangement is created, incorporating a system of checks and balances amongst the Ministry of Energy, the Ministry of Finance, the MPFSD, and the NAISEPHS.

This scheme will guarantee that contracts maximize the benefits for the country in a substantive and transparent manner, establishes new mechanisms for transparency, accountability, and anti-corruption and allows private participation in refining and natural gas processing and petrochemical activities.

Private participation is allowed in storage, transportation and distribution of oil, gas and their derivatives, through a permit granted by the Energy Regulatory Commission (CRE). Open access rules will apply for available capacity in storage, transportation and distribution infrastructure.

Private participation in storage, transportation, distribution and retail sale of gasoline and diesel is allowed.

The energy reform promotes energy sustainability and environmental protection.

Energy Reform: New contractual framework for oil and gas exploration and production

A flexible contractual framework with standard, well-known-by-industry models was established to enable better use of Mexico's resources in order to maximize revenue for the Nation:

Opening Mexico's energy sector to foreign competition would likely stand to reap lucrative contracts to the tune of billions of dollars developing Mexico's neglected power generation network.

The energy reform will mean many new opportunities for Kuwaiti companies and businessmen particularly in oil, gas and electricity generation sector. With these changes in energy production, delivery and consumption, Kuwaiti companies can take advantage of this.

Mexican President Enrique Pena Nieto signed into law a historic energy reform bill that will allow foreign companies access to oil and gas fields in the country, as well as opportunities to build, operate and distribute electricity.

The reform is meant to make Mexico's energy industry more competitive, and drive economic growth. Even while the country celebrated the 75th anniversary of Pemex last year, plans were underway to change the system. There will be many new opportunities in this sector because of the new reforms. Mexico needs $60 billion in annual investment in the oil sector alone, and Pemex can cover only $25 billion in new investment.

New shale gas reserves in northern Mexico could be tapped for further development of Mexico's natural gas sector.

Mexico hopes the massive $35 billion annual investment gap will be covered by foreign investments spurred by the new reforms. That would translate into an immediate 1 percentage point boost to annual GDP, while a revived Mexican energy sector could boost the economy by 2 percentage points annually from 2018.

In conclusion Ambassador said he would be leaving with a special sorrow and mixed feelings, and assured that it is not a goodbye but an Hasta Luego, till they visit Kuwait again.

-Staff Report

 

 

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