HOUSTON — The commercial figure of farm-out is the central element on which the success of Mexico’s upstream reform pivots. As the term “farm-out” borrows from commercial arrangements in agriculture, it is not too much of a stretch of the imagination to recast the entire upstream discussion as a topic of agricultural reform.
Our report, No. 1000045, employs the language and setting of a medieval times to look at the origin, choices and goals of the 2014 energy reform. Seen in this perspective, it unexpectedly becomes clear that Pemex has been promoting farm-out contracts since 2001, starting with the Multiple Service Contract. The proposed farm-outs of 2015 will be the fourth in a series—not the first.
The “Tale of Vronche” is about how, in the Hermit Kingdom, the Sovereign and his Lord Ministers had been alarmed by the decline of agricultural production. In consultations with an Advisor from abroad, a plan was devised to attract farmer-tenants from abroad who would become tenants, or “farmees,” in the Kingdom, and from whom good things were to be expected.
The report slyly retraces the history of energy reform in the upstream since 2000, and comments about elements in the Energy Reform of 2014.
You may download the title pages of this report here.
