Can you offer more information about the memorandum Pacific Rubiales signed with Pemex in 2014 to explore together in Mexico?

Pacific Rubiales had shown interest in the Mexican gas and oil sector since the end of 2013 when the law of reforms was signed. We sent several delegations to Mexico to have a better understanding of the industry, and we were confident that the reforms would be successful. Being the largest independent oil company in the region, we were well known by Pemex and discussed with their top management how we could work together. As Pemex is an important symbol of the Mexican national identity, it made sense for us as foreign independents to explore opportunities with them rather than compete against them.

Ronald Pantin, the CEO of Pacific Rubiales, said that Mexico would be an important part of the company’s future strategy when he signed the agreement. What potential does Mexico offer Pacific Rubiales?

Mexico provides a unique opportunity for anyone in the gas and oil industry right now. Few countries offer the same combination of extensive knowledge about existing oil fields and potential for further exploration. Pacific Rubiales is the largest independent producer of gas and oil in Latin America, so we could not ignore these opportunities. Although specific planning and actions are yet to be developed, we believe that our experience in heavy oil and enhanced recovery is particularly suitable for Mexico’s production needs. Outside of this niche, we also have opportunities in light and medium oil and shallow water and gas fields, leaving deepwater activity to others.

Much of this potential requires a lot of exploration, or huge injections of capital to increase production in mature fields. Are you concerned about these uncertainties?

Uncertainties are a natural part of exploration and development in the resource sector. Pacific Rubiales has a great team of experts who evaluate previously unknown fields for us and assess whether we can realize their potential. We have done this before with the Rubiales field in Colombia, which we grew from 17,000 to almost 250,000 barrels of oil equivalent per day. We are confident that we can apply our experience and technology to the opportunities that will be presented to us in Mexico.

Some important points of Round One are still unclear, such as royalties and the concept of administrative rescission. What do you think of this process?

Obviously, we will have to wait and see the fiscal conditions of these contracts before making a final decision on the blocks that are offered. Still, we will act on the assumption that Mexico will not undertake these constitutional reforms to ultimately prevent investment in the gas and oil sector. It is unlikely that the Mexican government will impose unfavorable conditions that make the sector unattractive to foreign investment. Based on what we have heard in Mexico so far, we expect it to be a regime similar to other developed economies in the world, perhaps very similar to what we have in Colombia.

Constitutionally, the reforms have been approved, but there was a petition with two million signatures to annul them. As an international company, how can you integrate into the local community?

The gas and oil sector is integrated into the structure of Mexican society, and we, as a foreign company, must respect this fact. It is not enough to have a management team that is mainly Latin American and speaks Spanish; we need to work with Mexican partners. Our agreement with Pemex is the first step in Pacific Rubiales’ entry into Mexico, but we will certainly deal with other Mexican companies to explore partnership opportunities.