Tale of Vronche (Part II)

MEI report cover

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.

Written by

Mexico Energy Intelligence

Baker & Associates offers niche-market business and policy intelligence related to Mexico's oil and gas, power and chemical industries. Over 1,000 reports have been issued in the last 20 years. Subject matter expert and publisher George Baker, who directs the firm, has carried out consulting assignments starting in the late 1970s at the height of the Oil Boom in Mexico. He brings bilingual and bicultural skill-sets to understanding and responding to challenges of business and public policy, coupled with a deep familiarity with the history and idiosyncrasies of the Mexican operating environment.