The Business Year

Alberto de la Fuente

MEXICO - Energy & Mining

Looking Forward to More

President and Director General, Shell Mexico

Bio

Alberto de la Fuente obtained a degree in Economics and a degree in International Relations from the Instituto Tecnológico Autonomo de México (ITAM). He later completed a Master’s of Philosophy in Economics and Social History from Oxford University and obtained his MBA from the Australian School of Business at the University of New South Wales. He has worked within the Mexican public sector at the Office of the Presidency, in the Ministry of Energy, and at the Energy Regulatory Commission. He joined Shell in 2006, working in Australia before moving to the Middle East. He became President of Shell in Mexico in July 2012, completing a fully Mexican management team.

What levels of investment will Shell be maintaining in the market over the coming years to finance its upstream operations? It really depends on what opportunities arise in the future. […]

What levels of investment will Shell be maintaining in the market over the coming years to finance its upstream operations?

It really depends on what opportunities arise in the future. Shell has made significant investments in the past. We have a contract with the Federal Electricity Commission (CFE) to supply LNG, and we have made significant investments in that area. The future depends on how the energy sector evolves. The expectation is that energy reforms will take place in the near future, and we will be following the debate and outcome of the discussion very closely with the intention of continuing to expand our operations in Mexico.

The development of Mexico’s untapped gas reserves remains the subject of much speculation. What can be done to capitalize on the opportunities that exist?

I think Mexico needs to sit down, take a pause, look at successful examples like Colombia or Brazil, and decide what it wants to adopt from these models to create its own. Then, companies like Shell will be able to make a decision on whether to participate and to what extent. We are very keen on working and cooperating with Mexico just as we have in the past. We run a refinery with PEMEX in the US, and our contract with the CFE is also very significant—we would like to continue these relationships. PEMEX has done a great job so far, but the challenges moving forward are so big that no company can do it alone. We are hopeful that energy reforms will take place in the near future that will allow Mexico to tap into its hydrocarbon resources.

What potential exists for Mexico to become a significant regional player?

I think that the potential is huge provided the regulatory framework that will be put in place is competitive against other models around the world. The knock-on effect of capital investment in the energy sector will have an impact on the rest of Mexico’s economy and allow it to continue growing at a very accelerated pace. Health, education, and energy are the key sectors of any economy, and in the case of Mexico, energy is very important. If it were to be developed more intensively, it would create an impressive virtuous cycle.

“The knock-on effect of capital investment in the energy sector will have an impact on the rest of Mexico’s economy.”

What are your key ongoing projects and development plans?

We are always looking for new opportunities in Mexico. At the moment, we have a few projects in the pipeline. One is called the Mexico Sourcing Office (MSO). Shell has identified four locations in the world where we would like to develop suppliers: Russia, China, India, and Mexico. We are bringing local companies that are established in Mexico up to Shell standards so that they can compete in Shell’s international tenders. We are making sure that suppliers buy into Shell’s code of conduct and principles, and then we certify them. It is a project that will hopefully not only benefit Shell, but other international oil companies (IOCs) around the world. It will allow them to compete in other international bids as well. We have a team here devoted just to this project and to working with companies in Mexico to make sure they are up to speed. We have a large operation in the US and in Canada, making Mexico very well placed. The labor force is strong and Mexico is very competitive in that regard. Even with the lack of pipeline infrastructure, we are looking on the gas side to see if we can establish or expand the usage of LNG, both in industry and transport. Gas is very competitive price wise. It is more efficient, cleaner, and there is the potential for users to make big savings. It is an area that we are again slowly opening up. I think Shell is probably the first IOC that is tapping into this new business, and it takes a long time and a lot of commitment.

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