Consulting Services

Our experience as consultants to management has been in assignments involving product introduction, bid preparation and investment decisions in Mexico and elsewhere in Latin America. Assignments in diverse industries—but mainly oil and gas and power—have given us a great respect for the disciplines of risk analysis.

In our view, risk analysis is an integral part of market assessment; it is as if each forecasted value of supply, demand and price had a probability coefficient attached to it.

Our approach involves a close examination of soft issues, the likely effect, for example, of trade union politics on an investment project. We encourage the development of an intuitive understanding by project managers of soft issues affecting business decisions. Often, we propose informational meetings for managers with industry veterans, persons who may, at a given point in time, be found in business, academic or government service. Such meetings are not for the purpose of lobbying or business development narrowly understood, but to gain a richer understanding of the legal, institutional and political complexities that, ignored, can derail a project.

Another issue, one difficult to describe in black and white, is the problem of misinformation. This problem affects government analysts and policymakers as much as it does prospective investors, vendors and contractors. It us understandable that government energy companies should seek to preserve their legal status as state monopolies in their respective industrial areas. Toward this end, counterintelligence measures seek to sterilize the flow of data to the outside world on corporate operations, investment options and unit costs.

We have found in the case of Mexico that the future is much easier to understand and forecast than the present. Mindful of this problem, we have developed a methodology that we call “scenario analysis of the present.” We put in question our understanding of the institutional and political chessboard on which a project initially seems to fit. We ask, suppose the rules of chess were changed in mid-game (as has happened several times in the petrochemical privatization efforts of the Mexican Government since 1995)? How would such a change affect the feasibility of an investment project or marketing opportunity? How would such changes affect competitor decisions or schedules?

Our work is not intended to compete with, or replace, internal exercises of investment and market analysis that form the traditional elements of corporate due diligence. Our work is to expand the measure of due diligence by offering an independent perspective that, otherwise, might easily be overlooked in the race to meet deadlines imposed internally or externally by the schedules of international tenders or regulatory agencies.