Up until 1938, foreign oil companies – many American firms among them – operated in the oil-rich country of Mexico. Then the locals got sick of foreign labor stealing their jobs, so they sent the foreigners packing.
Mexico nationalized their oil & gas industry.
Mexico then created PEMEX – Petróleos Mexicanos – their government-run oil company.
PEMEX was and still is, a national symbol of that one time Mexico stood up to El Norte and told them to get the hell out. Unfortunately, PEMEX is the Mexican version of the U.S. Post Office. It’s a huge, money-losing bureaucratic hot mess despite being propped up, Weekend at Bernie’s-style by a government-protected monopoly.
Imagine if the U.S. Post Office was not only tasked with delivering my mail to the neighbors, but also with analyzing highly-technical geologic CT scans and leading high-tech drilling operations in order to maintain our subsidized gas prices.
This is why Mexico is un-nationalizing their Oil & Gas (O&G) sector.
Mexico – ie, PEMEX – isn’t very good at what it does.
In 2013, PEMEX’s revenue was $126B.
Typically a company this poorly managed would be out of business.
When the government runs the company, well, there’s more options….
The profits – theoretical as they stand – revenue and cash flow are key ingredients in the national budget.
So Mexico is opening its borders to the O&G pros.
Now there will be more Mexicans than ever participating in the extraction of North American fossil fuels.
As is American custom, when we need workers ASAP to work dangerous, laborious jobs with little training, we turn to Mexicans. In the U.S. there is already a large and increasing number of Mexicans (and other Hispanics as well) working in Texas, Louisiana, Oklahoma and North Dakota O&G.
With this increase in Hispanic labor, managers who speak Spanish are becoming increasingly valuable.
Effective leadership & management starts with communication, right?
Now American companies will be sending thousands of employees to Mexico to the glorious gringo gusher known as Round One of the Mexican oil auction (Round Zero is for PEMEX only).
Spanish language skills will be vital.
Cultural awareness will be even more important.
Given the colorful U.S. – Mexico history and active conversaciones on borders and immigration, American firms hoping to sweet-talk their way into new business in Mexico better do their homework. They better understand la cultura.
Keep in mind the O&G invitation has been extended for one reason: dinero.
Former Mexican dictator, Porfirio Diaz, speaking on behalf of his people said, “Poor Mexico. So far from heaven, so close to the United States.”
This sentiment hasn’t changed much over time.
Once PEMEX – a dysfunctional national icon – gets back on its feet, the locals will get sick of foreign labor stealing Mexican jobs and reaping the profits from their natural resources. Mexicans will send the foreigners packing. Again.
History will repeat itself.
How foreigners – Americans among them – act in Mexico in the coming years will play a large part in how long they stay.
Bradley Hartmann is founder and El Presidente at Red Angle (www.redanglespanish.com), a training and consulting firm bridging the English-Spanish (and a bit of Polish…) language gap in the construction industry. For a longer read on this topic, check out Fortune’s excellent article written by Jeffrey Ball.