The role of states in the energy sector today

STRATEGY + INNOVATION IS WHAT WILL ALWAYS TRANSFORM THE ENERGY INDUSTRY APRILÂ 1 TO MAY 19, 2020

PRESENTED BY

OFFICIAL MEDIA

MEDIA PARTNERS

OPENING MESSAGE SPONSORS VIRTUAL OIL EXPO PARTICIPANTS Master Carlos GarcĂ­a - General Director - Valero MĂŠxico Dr. Roberto Luna - Head of the Oil & Gas Industry - Endress + Hauser We are experiencing an unprecedented situation worldwide, Mexico has not been immune from the problems

that

the

COVID-19

pandemic

is

generating, the industry is suffering a significant drop in crude oil prices and as a result of this there is a lot of pressure in the industry however, the fuel industry in Mexico is still a very interesting market.

It is very unlikely that in the short term we will return to the prices we had for hydrocarbons, since the margin will be reduced every time, therefore it is increasingly important to be able to optimize processes and improve them, since a country with the characteristics of Mexico has will always bet on hydrocarbons, especially explorati3on and refining.

The distribution of hydrocarbons is important, the sector needs to have independence and energy security in order to have fuels in Mexico.

We must take great care of certainty in the sector, since we are experiencing an over-regulation of the sector in storage and distribution of hydrocarbons, since at the end of the day the uncertainty can generate economic stagnations in the immediate future.

We are living through difficult moments that without hesitation we will get ahead and it is important

to

immediately,

consider we

will

starting be

facing

work an

soon not

as, very

encouraging scenario on the economic side, which will present different complications and challenges but will bring opportunities for companies that find prepared.

We are facing a watershed in modern history, experts estimate that the digitization of services has advanced, the future is moving towards the digital part.

PANEL 4 - WEDNESDAY APRIL 22, 2020

"THE ROLE OF STATES IN THE ENERGY SECTOR TODAY"

PARTICIPANTS

Moderator: Lic. María José González - Partner - Miranda Partners Senator Indira Kempis - Senator of the Republic of the State of Nuevo León Senator Armando Guadiana - Senator of the Republic of the State of Coahuila Senator Cruz Pérez Cuéllar - Senator of the Republic of the State of Chihuahua

TOPICS

1. Agreement reached by Mexico regarding the cut in crude oil production 2. Is it convenient to continue with the flag of saving Pemex?

3. Will the energy plan presentation be seen soon?

4. How each one sees the role of each of the states in this situation and the Mexican energy sector in general?

"THE ROLE OF STATES IN THE ENERGY SECTOR TODAY"

In these days we have seen a historical collapse in oil prices, which has had an economic impact both internationally and in Mexico, which adds to the effects we are experiencing with the COVID-19 pandemic.

In the face of this historical fall in the level of crude oil prices, President AndrĂŠs Manuel LĂłpez Obrador announced that he will close the production of the new oil wells and grant a fiscal boost to Pemex for up to 65 billion pesos, with the aim of that the company can meet its goals for this 2020.

In this international scenario there are two important variables: economic and political, on the one hand it is true that agreements of this type must be reached where it is essential not to produce maximum oil levels if they are not going to be consumed and there are no places for storage, this part is economically

fine,

however,

Mexico's

economy is petrolized and that is what causes

everyone's

uncertainty,

while

politically it lends itself to much adversity, it is important to understand that if there is no energy

transition

guide

that

allows

independence at these critical moments, it will be very difficult to face the adverse scenarios

that

economically

comes

for

Mexico, a country that depends on the production of its oil.

"The bet, although it was not what everyone expected, at least pauses to see where the market is going and what can really happen in future months, at this moment the big question is not what is happening now but what will happen next with prices and with everything that comes�, said Senator Indira Kempis.

"THE ROLE OF STATES IN THE ENERGY SECTOR TODAY"

At this moment, one of the important things that Mexico has as a country is the excellent relationship that President López Obrador has with the United States government led

by President Trump, which means that within this problem of the COVID-19 pandemic, everything walks much better.

It is important to highlight that we are a country that imports more gasoline every day, which is why we should not be so dependent on the outside in terms of gasoline since that puts us in a vulnerable condition.

"We have to open a great national debate by 2021, we must carry out with greater force the participation of the private sector in energy matters, it will be essential since there are not enough resources, we also have

to

look

at

renewable

energies

everywhere what we are going through and that Mexico is not so dependent on oil”,

assured the Senator Cruz Pérez Cuéllar.

The problem has not been oil, it has not always been Pemex, the problem has been not having a vision of the changes that are coming for the world and not understanding that what is happening today is to change the economic model.

The opportunity today is the bet on what is coming, the COVID-19 pandemic accelerated the changes that should have happened for quite some time.

"THE ROLE OF STATES IN THE ENERGY SECTOR TODAY"

“By the year 2050 we have a goal that at least 50% of the energy generated be renewable energy, however in the global context, natural resources such as oil, gas, coal,

etc.

We

have

to

continue

taking

advantage of them, advancing on a par with renewable

energies�,

mentioned

the

Senador Armando Guadiana.

The next challenge is enormous, for which you have to look for private investment since there is no way that everything will sustain it in

the

Mexican

state,

however

it

is

an

opportunity for the government, to attend to these links that not only make the decisions in a single power, but there is a debate that there will be more possibilities.

In conclusion, we are aware of the health problem

we

are

in,

but

the

economic

problem that will come for each of the mexican families will be more difficult, for which a national plan is needed in which the President of the Republic, the Secretary of the Treasury, the Bank of Mexico, the Ministry of

the

Economy,

business

and

union

organizations, to push all the great wagon that is Mexico, to get out of the crisis in which we find ourselves, in order for economic development to reactivate as quickly as possible.

COMPLETE PANEL

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BUSINESS TABLE GOVERNMENT OF THE STATE OF VERACRUZ

Bachelor Business Administration Ricardo Enrique

Mancisidor

Landa

-

Undersecretary of Promotion and Support to Industry of the Secretariat of Economic and Port Development of the State of Veracruz Actions that the state of Veracruz is generating in face of the situation that we are going through:

Since

the

contingency,

beginning

of

the

of

state

the

health

Veracruz

has

undertaken several actions to mainly support micro-companies, companies that have fewer than 50 employees.

1. They deferred the payment of the payroll tax to pay it between July and December of this 2020.

2. They suspended some of the fiscal and administrative reviews carried out by the Ministry of Finance and Planning, the Ministry of Health and the Ministry of Labor, Social Security and Productivity, which means that they suspended all activities to support the issue of social distancing so that they do not those who, when going to a review, were not working, so that they can stop working without incurring any crime by not being present, additionally they have the extension of the term to access the subsidy of 100% of the payment of the 2020 tenure , which was extended until June 30 in order that they do not have to make an expense during the contingency.

BUSINESS TABLE GOVERNMENT OF THE STATE OF VERACRUZ

3.A

platform

was

designed

for

this

contingency that promotes and links the businesses

provided

by

companies

from

Veracruz to boost purchases and the online market.

4.They have a credit program for micro companies, loans of $10,000.00 each at zero rate, with a 4 month grace period to be paid in 24 monthly installments.

Business opportunities and projects that the

state

is

promoting

to

detonate

investment and create opportunities for the energy industry, adjacent industries or around other sectors that represent large investments:

The state of Veracruz is a very large state, not only in size, but in different vocations, it has many

areas,

which

gives

investors

the

opportunity to feel attracted to the state.

"To

better

serve

the

entire

range

of

opportunities, last year we installed in the state the State Energy Agency, which is responsible for directly serving all investors, from this we already have many important investments�,

said

the

B.B.A

Ricardo

Enrique Mancisidor.

Additionally,

the

main

sectors

that

will

promote in the area have already been determined: Agro-industry and forestry: production

and basic agricultural processes, timber issue, installation of paper factories and tree pulp processing for paper processing, industrial food processing, export of world food brands.

Renewable energy and storage.

BUSINESS TABLE GOVERNMENT OF THE STATE OF VERACRUZ

Manufacturing:

textile,

chemical

and

petrochemical industries, production of transport equipment, consumer products, consumer

equipment,

construction

materials,

production

of

pharmaceutical

industry and transport equipment.

Services: agrotourism, culture tourism and

financial services.

Logistics and packaging: handling of raw

materials,

packaging,

storage

and

distribution and the nature of the Isthmus of Tehuantepec.

With this, Mexico will be the only location with a front towards the Gulf of Mexico and towards the East Coast of the United States, Europe, Africa and South America, speaking of the Atlantic side, and on the other hand we will be a hutch for the entire Pacific, the West Coast, everything that is South America on the Pacific side and also the front to the countries of Asia.

Veracruz has high opportunities for many market niches and for many sectors.

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GRATITUDE

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the

forward.

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