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In Memoriam

Edgar René Rangel Germán, NATIONAL HYDROCARBONS COMMISSIONER

Last year I had the opportunity to hear Mr. Rangel’s lecture at the 2015 Offshore Technology Conference (OTC) in Houston, Texas. It was outstanding and electrifying, particularly the way he mastered the concepts, his point of views, and his special talent and wisdom to turn highly complicated technical terms into plain English, in short, his humbleness.

Mr. Rangel was appointed CNH Commissioner by former president Felipe Calderón. In 2013, President Enrique Peña Nieto reappointed him to a new term. He received his undergraduate degree in petroleum engineering from the National University of Mexico (UNAM) and completed both his masters and doctorate degrees in engineering at Stanford University. He was widely credited as being a central artifice of the implementation of the oil and gas sector reform[1].

Honestly, I was shocked when he died. Indeed, I was preparing an article about the new hydrocarbons criminal law, remembering some of the innovative energy paradigms based on Mr. Rangel´s understanding.

For the aforesaid reasons, I won’t make any comment about his lecture; instead I’ll try to summarize his words to the best of my knowledge, as authentic as possible, because his speech at the OTC is now part of his legacy:

Mexico’ s new hydrocarbons era.

  • He explained the potential and diversity of our natural resources and large vast (conventional and unconventional) resources.
  • He stated that the Brazilian model was taken into account for the Mexican one.
  • He mentioned that the flexibility of the contracts will be dependent on the resource to be exploited.
  • The Mexican Energy Ministry (“SENER” for its acronym in English) designs contracts and terms of the bid (with the sanction of the Federal Economic Competition Commission (“COFECE” for its acronym in Spanish) and the Finance Ministry (“SHCP” for its acronym in Spanish)).
  • The main idea in the energy sector is: to provide the best contractual model for the right resource with flexible and adaptable fiscal terms.
  • The biggest challenge: oil prices. The energy reform was done under an oil barrel price analysis from 1861 to 2014 and the outcome was that the price has always been increasing, so he was confident that it shall rebound in the future.

Once he finished, the US counterpart in the discussion followed with her lecture. She pointed out that the United States of America believes in free, fair, modern and competitive market theory, thus it is not necessary for the US to have a national oil company, which is why major international companies are setting in her country. She based her beliefs on the following questions (quote):

  1. What is your primary geographical focus in the oil and gas industry?
  2. Having national oil companies (NOCs) make investment in a country[2]?
  3. Is technology a key component to make a country an energy hot spot?
  4. Are national oil companies investing overseas a positive for attracting international oil companies[3]?
  5. Does local content need to be better defined by countries attracting investment?

At the end of all lectures, Mr. Rangel told me that there was not a simple answer, despite the pro-cons arguments you might find out, demonizing national oil companies makes no sense at all, at least in Mexico, due to our vast natural resources, experience and understanding of the industry; yes Mexico also believes in free, fair, modern and competitive market theory, but make no mistake, the US government will fiercely protect its oil industry, no matter what it takes, with or without a NOCs; that doesn’t mean pure free trade theory, right? (he concluded).

Thank you for sharing your broad perspective of the oil industry, your knowledge and fine print about the oil reengineering that is taking place in Mexico. I do appreciate.

Rest in peace, Mr. Edgar Rangel; Doctor Rangel, gracias.

[1] Author: Dwight Dyer, Source: El Daily Post, available at: http://www.eldailypost.com/opinion/2016/03/vacancies-in-energy-regulators-executive-boards-keep-piling-up/ April 25th, 2016.

 

[2]   Rephrasing: Having national oil companies (NOCs) encourage or discourage investments in a country?

[3] Rephrasing: Do NOCs investing overseas send a positive message for attracting international oil companies?

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