Elba Arjona has an impressive resume, practicing law for 15 years, specializing in the energy sector in Mexico. Elba has worked at both the Ministry of the Interior, National Hydrocarbon Commission and the Ministry of Energy in Mexico driving key energy reforms forward as well as advising many private companies regarding the domestic and international oil industry.
Today, we begin our BBA Spotlight Series with Elba Arjona. A weekly spotlight interview with a BBA member learning more about their career, highlights and expert insights.
Q1. At what point in your career did you decide to focus on the energy sector and why?
In 2013, when I returned to Mexico after getting an LLM degree in maritime law, I never thought I would end up focusing in the energy sector, but I was offered a position in a consulting firm specialized in oil and gas at the time when the Mexican Energy Reform was being discussed. As I said to myself when accepting the position, a platform is a vessel and both industries are connected.
This position let me interact and learn the view of both sides of the business since we advised both the government and some of the major oil and gas companies. I was lucky to have the boss I had and to be part of a team that got to know the reform from the inside. Its was at this point I knew I wanted to specialize in energy law.
Q2. What key challenges do you think Mexican and US companies face in cross-border deals in light of Mexican energy reform and USMCA obligations and what are the biggest challenges facing US energy companies operating in Mexico today?
As I mentioned in my JD dissertation, there are many risks associated with the energy industry, some of them are operational and can be assessed by the companies prior to investing or entering a project, other are non-operational risk related to the country or area where the project takes place.
Among the non-operational risks that may affect the decision to invest in a given country are lack of experience with foreign investors in the industry, having an underdeveloped legal framework and excessive bureaucratic burdens and lack of legal certainty. Additionally, there are political risks such as regulatory changes or interference through the modification of legislation and contract violations.
Today, the biggest challenges US energy companies face is the non-operational, including the political risks since the Energy Reform was put on hold through the implementation of public policies even against the law and the commitments previously undertaken, including the investment chapter of USMCA.
Q3. What future energy reforms do you see benefitting the Mexican people and the energy sector as a whole?
As part of the 2030 Agenda for Sustainable Development, Mexico must take actions to combat climate change. In this regard, some of the enforceable energy reforms shall be related the use of clean sustainable and modern energy.
Q4. Energy is a hot commodity, especially concerning current world affairs. How can Mexican companies facilitate deals to make the most of this situation?
One of Mexico’s advantages is its location. With the current tensions between US and China, U.S. companies are beginning to reconsider their future plans and lean toward diversifying their portfolios by assessing the advantages of nearshoring operations across the border. This opens opportunities in Mexico for American companies in the energy sector.
On the other hand, Mexico’s location can also benefit Mexican companies with accessible natural gas from the Waha Hub in the Permian basin. In the past days, spot natural gas prices at the Waha hub dropped to negative due to a cut in demand for the fuel. However, in order to benefit from such prices and make the most of this situation, there is a need for midstream infrastructure in Mexico (transport and storage capacity).
Q5. You have been practicing law for over 15 years now, can you tell me a highlight of your career.
One of the highlights of my career is when working at the Ministry of Interior, as an advisor to the Minister, I participated in a set of high-level meetings with CFE top management to present an analysis made regarding the disputes that led to the renegotiation of natural gas transport contracts. During such time, I also participated in the resolution of social conflicts on issues related to CFE gas pipelines meeting with the social communities affected and working as an intermediary with the companies to help them get an understanding with the community.