Financial Times cites a new Atlantic Council report, Mexico’s Energy Reform: Ready to Launch:
Good work has been done to iron out investor concerns, on tax issues like ring-fencing, notes David Goldwyn, chief author of a new report by think-tank the Atlantic Council. But with some potential speed bumps lying ahead, here’s some smart advice in the form of the six speedy steps Mexico needs to take next:
1. Make tax terms and contracts competitive. As Goldwyn told a conference call, in the case of unconventional resources – the shale plays that are located in areas where drug cartels pose a major threat, where infrastructure is scarce and land issues complex – “the Treasury is going to have to be imaginative to make sure that the fiscal terms match the risk”. He reckoned Mexico was not being “very generous” but the overall terms looked well in line with its peers.