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Organized byNorth American Forum on Integration (NAFI)Escuela de Graduados en Administracin Pblica y Poltica Pblica del Tecnolgico de Monterrey (EGAP)Mexican Council on Foreign Relations (COMEXI)

Abstracts

MEXICOS ROLE IN FORGING NORTH AMERICAN ENERGY SECURITY

Friday April 2, 2004Room Continental - 9:00 to 9:30 a.m.

In order to attract the much-needed financial resources to Mexico, its energy resources need to bedeveloped and used in the short-term to meet immediate needs. While respecting the Mexicanconstitution, could Pemex double its oil production in the coming half-decade and attract privateAmerican and Canadian capital to the Mexican oil sector?

Jorge G. CASTAEDAFormer Foreign Minister of Mexico

Jorge G. Castaeda received his B.A. from Princeton University and his Ph.D. in Economic History from theUniversity of Paris. He has been a professor of international affairs at the Universidad Nacional Autnoma deMxico. Castaeda was one of the principal electoral strategists of the presidential campaign of Vicente FoxQuesada, who won the July 2000 elections. He served as Foreign Minister of Mexico from December 2000 toJanuary 2003. In June 2003, Jorge Castaeda was appointed as a Board Member of Human Rights Watch andInternational Crisis Group. He is also a member of the United Nations Commission of Private Sector andDevelopment.

ABSTRACT

No abstract available at the moment

Abstracts

FINANCIAL MECHANISMS OF THE MEXICAN ENERGY SECTOR

Friday April 2, 2004Room Continental - 9:30 to 10:20 a.m.

What options exist for assuring an increased financing of the Mexican energy sector in the presentconstitutional context? Various scenarios will be considered. In what way would investment be carriedout and managed? What would be the potential return on investment? Would increased financingstrengthen North American energy security?

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CHAIR

Andrs ROZENTALPresident, Mexican Council on International Relations

Andrs Rozental has been a career diplomat for over 35 years, having served Mexico as Deputy Foreign Minister

(1988-1994) and as Ambassador to the United Kingdom, Sweden, and the United Nations in Geneva. He also servedas Special Presidential Envoy for President Vicente Fox. Ambassador Rozental is currently the Executive Director ofan international consulting firm that backs the corporate strategies of international companies in Latin America. Heis author of three books on foreign policy in addition to having published numerous articles in specialized journals.Ambassador Rozental is also member of the University Council of the Universidad de las Amricas (Puebla), hisalma mater.

SPEAKERS

Jos ALBERRODirector, Law and Economics Consulting Group (LECG)

Dr. Alberro is a Director with LECG, the global source for expert services. He was PEMEXs chief representative in theNAFTA negotiations between 1990 and 1992 and then Director General of PEMEX Gas and Petrochemicals (PGPB),

one of the ten largest companies in Mexico, between 1992 and 1994. Dr. Alberro is a former consultant to theUnited Nations, has been an arbitrator at the World Banks International Centre for Settlement of InvestmentDisputes, and has taught economics at universities in the United States, Mexico and the United Kingdom. Dr.Alberros expertise covers economic and financial modeling; analysis and design of public policy and industryderegulation; and analysis of economic, social, and political feasibility of projects.

ABSTRACT

How to structure and operate a special trust to fund increased oil and natural gas production andgenerate the 10 billion dollars a year needed to invest in the human and physical infrastructure Mexicosfuture demands?

Premises:

- Mexico has the resource base to increase production;- Mexico has an oil company up to the challenge;- Mexico has a geopolitical and a business interest in strengthening North American Energy

Security;

- Under appropriate circumstances, Mexicos friends would be willing to help finance this strategy;- Any mechanism has to be transparent and auditable by all stakeholders (Mexican and

international alike)

This endeavor will require 60-70 billion dollars to be disbursed over a six-year period. There are at leastfour mechanisms and no magic bullet; the advantages and disadvantages of each have to be analyzedcarefully:

1. Normal budgeting resources from the Treasury2. Project financing in the form of established PIDIREGAS3.

Advanced sales of new production4. Infrastructure trust funded by development banks (IDB, World Bank, US, Canadian andEuropean governments, etc..)

Mexicos good credit rating has to be leveraged to obtain financing with a 15 year horizon and a 5 yeargrace period, guaranteed by oil export revenues. Such a long term strategic commitment would havesignificant spillover effects in several industries the least of which would be refining and petrochemicals.

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