Brazil’s compelling energy profile demands continued consideration. The country is the eighth largest energy consumer in the world and third largest in the Americas. In terms of production Brazil is the ninth largest globally and trails only the United States and Canada in the Western Hemisphere. In South America, Brazil is second only to Venezuela in oil production terms. But the country faces critical questions for attracting energy investment.
LA JOLLA – Over the past three decades, Central America has experienced an increase in violence and crime, which has largely been attributed to the emergence and proliferation of youth gangs. Policy makers throughout the region are struggling to find the right mix of suppressive and preventative policies to confront the gang problem.
To respond to these concerns, the Institute of the Americas convened high-ranking law enforcement officials, state prosecutors, anti-narcotics agency representatives and leaders of community-based organizations working with at-risk youths in several Latin American countries for a five-day professional workshop at its La Jolla, Ca., campus. The workshop, organized and directed by the Institute of the Americas and titled “Gangs, Youths and Demand Reduction,” focused on five thematic areas related to this regional public security issue.
The areas of discussion included community policing strategies and the role that the education system can play; the prevalence of substance abuse as it relates to gang activity and public health responses to the problem; and alternatives for at-risk youths such as employment, arts and culture programs, religion and sports.
U.S. expert speakers working on both suppression and prevention policies, as well as specialists in substance abuse, met with workshop participants to discuss alternatives and approaches to the spread of gang activity. Participants and speakers agreed that a comprehensive, regional approach to gangs is necessary to prevent further escalation of the problem.
Steven Vigil, a conflict mitigation specialist who served as the co-chair of the Transnational Advisory Group in Support of the Peace Process in El Salvador, told participants that efforts to address the gang problem are failing because “this is a transnational problem that is being dealt with on a local level. You have local law enforcement that are trying to deal with a problem that is bigger than them. Law enforcement needs to be done in conjunction with other programs. Suppression puts too much pressure on law enforcement to solve the problem.”
Four top-ranking Panamanian police officials who attended the workshop met with Panama’s President Juan Carlos Varela immediately after returning to discuss implementing anti-gang measures based on models they studied during seminars at the Institute of the Americas and during field visits to programs such as Homeboy Industries in Los Angeles.
Raymundo Barroso, deputy police commissioner of a Community Crime Prevention Unit of the National Police of Panama, attended the workshop and subsequently met with President Varela along with Panama National Police Major Samuel Nieto; Luis Ortiz, also deputy police commissioner of a Community Crime Prevention Unit; and Ayda Villarreal, Chief of Police of the Children and Adolescents Division.
“During the meeting with President Varela, I was commenting about the experiences we had in San Diego and Los Angeles,” Barroso said in an interview from Panama. “ I spoke to him specifically about Homeboy Industries. There is a program that we have here in Panama that is similar but it seems to me that Homeboy is much better and that is the part that we need to study more closely.”
During the workshop, the participants heard in-depth presentations about alcohol and drug abuse and the role that substance abuse plays in encouraging and supporting gang activity.
Dr. George Koob, director of the National Institute on Alcohol Abuse and Alcoholism in Washington D.C., detailed the irreversible damage caused by alcoholism and drug abuse. Dr. Carmen Pulido, adjunct professor in the University of California, San Diego, Department of Psychology, spoke about best practices to respond to substance abuse in children.
The program incorporated field visits with in-depth sessions with specialists in the areas of gang prevention and programs to assist youths who seek to abandon gang life.
At Homeboy Industries, participants met with former gang members who spoke about their reasons for joining gangs, as well as learning about the organization’s jobs program for former gang members. The participants also met with the founders of Southern California Crossroads, an organization that works with gang members in the violence-plagued city of Compton, south of Los Angeles, as well as the neighborhoods of Watts and South Central Los Angeles.
“People are getting killed every day in Los Angeles. The homicide rate has gone up,” said Paul Anthony Carrillo, director of Southern California Crossroads, who has trained more than 500 gang intervention workers over the past six years.
Dr. Michael Jiménez, a surgeon at St. Francis Medical Center, said the hospital handles an average of 2,200 trauma cases a year. The hospital treats more penetrating wounds – bullet wounds or knife wounds – than any other hospital in Los Angeles. Some 38 percent of the trauma cases at St. Francis are penetrating wounds. Dr. Jiménez works with Carrillo and Southern California Crossroads to persuade injured gang members to leave gang life. “When they’re in the hospital, it’s a teachable moment because they are vulnerable,” he said.
San Diego, participants made a half-day field visit to the Kearny Mesa Juvenile Detention Facility where officials explained the protocols for responding to potential gang activity in the facility. And at the San Diego County Office of Education, Student Support Coordinator Anthony Ceja engaged participants in mentoring exercises to more fully understand why youths join gangs, the signs of gang involvement and steps that parents can take to guide their children away from gang activity.
“If you have children, listen to them but don’t judge,” said Shanell Rodriguez, a former gang member who now works with Ceja’s Project AWARE program. “If they have one person in their corner who sees something good in them, then they are going to make it.”
Arcela Nuñez-Álvarez founded Homie UP, a San Diego-based non-profit organization, and established a Popular University to educate Latino youths and their family members – not only in the basic academic courses but also about their roots and their culture. “We give them a positive sense of who they are,” she said.
At Writerz Blok in southeast San Diego, co-founder Sergio González talked about a program to encourage graffiti as a modern art form – on T shirts and the walls of the organization’s property instead of on the streets where taggers can be arrested. Writerz Blok offers modern art classes and a free summer camp to channel criminal tagging into marketable art.
“We are never going to end the gangs,´ said González, whose non-profit organization has received numerous awards and recognitions from the City of San Diego. “But what we can do is help those who might go into gangs change their path in life.”
On May 20, 2009, then-President Felipe Calderon appointed five commissioners to legally constitute Mexico’s oil and gas regulatory body, the National Hydrocarbons Commission, or CNH for its name in Spanish. Just over four years later, Mexico’s new president, Enrique Pena Nieto sent shockwaves across the global energy world as the country amended its Constitution to break national oil company Pemex’s years-old monopoly and allow private companies to search for and develop its hydrocarbon bounty.
Barely out of its proverbial diapers, CNH was thrust into the pilot seat of the country’s effort to usher in a new oil and gas future. Further establishing itself as an independent upstream regulator was critical. First and foremost was the requirement to develop capabilities to execute an aggressive campaign to develop opportunities for bid rounds and investment by private players, something that had not happened in Mexico for almost 80 years.
Today, as the second tender of private contracts under Round One is held in Mexico City we are witnessing the beginning of what can only be called a new Mexican oil industry. Indeed, financial bids will be opened to determine the winners of the five blocks offered to the private sector for extraction in fields in shallow waters off the coast of Campeche and Tabasco.
The first tender held on July 15 won plaudits for its process and transparency, but fell short in terms of contracts awarded and investment commitments. These processes, however, are organic and evolutionary. Indeed, the lessons from mid-July have greatly informed today’s bidding.
What was learned from the first tender? First, transparency and execution are critically important. But so are competitive fiscal terms as well as clear and unambiguous contractual obligations and terms. These elements are ever more important given the continued volatility and drop in global oil prices. Regrettably, the current price environment as the second tender is held has only gotten worse.
In an effort to emphasize that the government understands the need to continue to tweak the bidding process, several changes have been made in advance of today’s bidding, beginning with announcement of the minimum value for each block. That change has already been implemented and on September 14, the minimum values of operating profit the government will receive corresponding to each block were announced.
In addition, a revised corporate guarantee has been developed. Companies will now be required to provide a $2.5 million bid security guarantee in total and not per block.
Further, the government has addressed a key concern from the first tender surrounding additional reserves. Specifically, new language will lend clarity and provide successful bidders additional exploration and production rights beyond previously discovered reserves.
Buy beyond the first tenders and Round One, the true backbone of what will constitute a major step forward and give form and function to Mexico’s oil industry in the coming years is also being created. The cornerstone that will enable growth of the new Mexican oil and gas industry is the development of an in-depth knowledge of the country’s vast subsurface.
Given the volatility and inherent high risk of the oil business, much depends upon information and particularly understanding of the country’s geology. Indeed, the industry depends upon and invests in gathering data and acquiring knowledge to better understand a country’s “below ground” opportunity.
Mexico is a notoriously underexplored oil and gas province. Moreover, the country has had a paucity of seismic and other key data. With an eye to the future and in its efforts to create a world class oil market in Mexico, the CNH is making a great deal of progress on overturning the country’s chronic lack of oil and gas data and particularly modern, 3-D seismic information.
The Mexican Congress gave CNH the responsibility to develop and manage the understanding of the country’s subsurface as it pertains to the oil industry. Indeed, the laws enacted in 2014 mandate CNH to create a formal system to deal with this issue. CNH has thus created the National Hydrocarbon Information Center. The Center already houses much of the information gathered by Pemex in the past, and it will receive the new data being generated by a wide range of companies that are currently carrying out seismic, geophysical and other studies.
To wit, CNH has granted 22 permits for 11 private companies to conduct assessments and in-depth studies of various subsoil basins across Mexico. In order to synthesize the information contained in the permit applications, CNH will integrate all the appropriate data into a single map. In short, this effort is aimed at creating a national map and profile to show the best expectation for the industry on areas with the highest prospectivity in Mexico.
All of these pieces are part of CNH’s ongoing mission to facilitate investment at the same time as regulating and rendering the utmost transparency for the nation’s hydrocarbons.
A broader, more in-depth understanding of Mexico’s oil and gas potential will not only enable the government to continue to move forward on oil and gas bidding but also deepen the understanding across all of Mexico vis-à-vis the oil and gas sector. Information is increasingly available to anyone interested. In the oil and gas business, like many other technology driven enterprises, data is king.
Moving Mexico’s oil sector forward requires indefatigable efforts and an understanding that today’s failure often greatly informs tomorrow’s success. The turbulence of today’s oil market is not for the fainthearted and demands constant reappraisal of all facets of the bidding process. But Mexico is committed.
Today’s efforts from bidding to historic data and information gathering are intended to provide a window and boost to the future of the Mexican oil industry.