 Welcome to the debate on the future of energy. We have a number of distinguished guests here to discuss what's going to happen with energy in the world over the next few years, over the next few decades. In fact, we're looking at a time when we see a changing world in energy. We see prices of oil that used to be over $100 a barrel collapsing to $50, $40 unless we're also looking at new energy sources actually coming into line and providing energy for our societies. We have a magnificent cast of people who've been working in the industry for a long time right in front of me, Ignacio Sanchez Galán. He's the head of Iberdrola, a Spanish company that does most of its work outside of Spain. He's been in the energy business for many years. At the same time, Ignacio Sanchez Galán is also the president of the University of Salamanca, Spain's oldest university. Samir Vico, he's the chief executive officer of Amac Foster Wheeler. This is a UK company that specializes in providing engineering services to companies in the energy sector throughout the world. We have Tomás Gonzalez Estrada, he's the minister of mines and energy of Colombia. Colombia is a very little known example of success in the energy field. Not everyone thinks of Colombia as a major powerhouse in the energy sector. However, the development of energy sources in Colombia has been remarkable over the past few years. Emilio Lozoya is the chief executive officer of Pemex Petroleum Mexicano, a company that is undergoing a transformation. It was a government monopoly in oil for many years in Mexico. Now it is facing competition in the light of the new energy reforms that have taken place in Mexico. I do want to thank all of you for being here with us in this World Economic Forum, a future of energy debate. Ignacio Sanchez Galán, you are a man who's been in the energy sector for your entire life, but your grandfather was an energy producer, your great-grandfather was an energy producer. You're hitting a company that was born in Spain, that is doing business all over the world. What are you encountering? Is it difficult for a Spanish company to go outside of Spain, outside of Europe, and do business all over the world? Well, I think, as you mentioned, we are a company that was born in 1901, over a hundred years old. Always, we have been private. Most of our utilities have already been part of the history of the state. We've never been a state. Always have been private. You mentioned my great-grandfather was one of the funders of the small thing. The grandfather of my predecessor was another small one, etc., etc. We've been joining forces across the century. And I think that is what we did internationally. In one moment, we are now by far. Fifteen years ago, we were by far the largest in Spain, but we decided to internationalize ourselves. How we internationalize? So we move, as most of the Spaniards, first of all to America. We have already came to Mexico. We are in Mexico in 1999. So we are now, we have an important president in Mexico. We are in Brazil. But we decide to expand our activities in Europe, in the United States. We have investment of more than $30 billion. So we are present in 24 states. We have the distribution and power generation as well in Wales, in Scotland, and in part in north of England. So, and I think we've been moving in international. How we make? Using the experience of a hundred years of mergers, and mergers, and mergers. So I think we are the result of a company which joining forces. We demonstrate the joining forces. The result is better than being alone. So I think the world become global. In joining forces, you are more global. You are more competitive. If you are learning, you can learn from one side to another one to do the things together. That is what we did. It was not difficult. It's just we use the talent of whatever country we go for making the things in a different manner. And that is the result of the company. Now we are one of the four or five largest worldwide. And we continue expanding. Just in this moment, we are already, we decide to merge with another American company. The distribution company in Connecticut and Massachusetts, a part of New York and Maine that we are already present. So we are making that one. And we should do the same manner. Joining forces, using the talent of those people, what we can do. And sharing whatever experience we have already learned from one country to another one. That's our experience. Sameer Brico, we are experiencing a revolution in the energy world. And it's not only prices. I mean, prices were up, down right now. We're also experiencing a technology challenge, a technology revolution. How much is that affecting the market? How much is that affecting the future of energy? I think the most important thing actually is the revolution in the shale gas and the tide oil in the U.S. And that revolution has started with a new technology which is about the flexible horizontal drilling rather than just simply a vertical drilling. And that's changed the world quite a lot. You see the U.S. being a major consumer in the world. It consumes about 25% of the energy of the world. But also it was at the same time importing more than 10 million barrels a day. And today the U.S. through the technology has converted itself from being actually an importer to be soon an exporter of energy. This is one of the technology which has made a breakthrough. But it is not only about the horizontal drilling or flexible drilling. It is the speed which you can set up such an application. It is the speed that you can come up with energy production. But also it is the speed how fast you can shut it down. So this is one of the technology which I made a breakthrough. The second one is, of course, is subsea activities and deep water activities which we see, for instance, in Brazil and other places in the world. And these two combined has changed quite a lot in the supply side of the energy equation. Is there a lot more pressure on the ecology side of the equation? You talked about fracking and horizontal drilling. At the same time we have NGOs that are putting a lot more pressure on oil companies. Is that how do you handle those pressures? And what do you do? What do you do in order to reduce the impact on the ecology? So at AMIC for Stovila we have about 8,000 scientists and expertise who are doing nothing else than environmental business. And they work side by side to the oil and gas team. So for instance in the operations on the U.S. because of the, let's say the geology and because of the technology on the horizontal drilling. So you are having quite a lot of methane actually flaring which has not been that great and that's why you could see for instance that emissions in North Dakota is actually higher than the Great Lakes in the U.S. where the heavy manufacturing is located. And therefore what we needed to do is to rethink the whole drilling possibilities and what we are doing now today is making environmental impact studies about how do we do the actually drilling, how we make it more tighter in order to be sure that no gas gets released. But there isn't a big environmental issues and we need to tackle that. When you talk about major energy producers in the Americas you think of Mexico, you think of Venezuela, you think of the United States of course but you rarely think of Colombia. However Colombia has been a major surprise in the energy sector over the past few years. Why is that? Why has Colombia surprised the world Tomás González Estrada? These are very interesting times for the energy sector. It's very encouraging and very interesting. We are very excited to see the steps Mexico is taking forward in the energy reform not only the extent but the pace at which things are moving and I say this because Colombia did undertake similar reforms around 8 to 10 years ago and we did three fundamental things. The first is we separated the energy, the national oil company we decided the national oil company was going to become a company and we created an agency to promote investment and to administer resources. We also created a more competitive contract and we created a mechanism to attract investment which were bidding rounds like the ones Mexico will carry out and the results have been very, very good for Colombia. We multiplied investment by three. We actually rank I think 12 or 14 in the world for attracting investment over the past five years. Secondly we doubled production and thirdly we were able to increase revenue and this is very important because in the end it's about development. Energy policy has to be about development and when you look at the pace at which we're building roads we're reducing poverty, we're doing social investment all of these things are tied up to the energy sector to revenues that come from oil and these revenues are tied to reform. If you look at the past five to seven years we had a huge increase in prices but not every country was able to increase production the way we did but the story is not just a story about prices. It's a story about doing a proper reform and getting the benefits of reform after you do it. Mexico is undergoing a major energy reform right now. The reform has been approved in Congress passed by the president approved by the state legislatures and now comes the great matter of actually making it work. Emilio Lozoya, what are the problems that you are finding at Pemex to make this reform work at least on the part of oil? The energy reform is indeed one of the biggest transformations in the Mexican economy over the last decades. It has been passed at the constitutional and the secondary law level and now we've been implementing it over the past six to eight months but sometimes we forget all of what has been done over the last six to eight months in order to increase production and a number of new agencies have been created and have been staffed you have to find the talent as well. There were also processes to strengthen the two existing agencies the national hydrocarbon commission which is modeled more or less after the Colombian experience and the energy regulatory commission that will in particular regulate the prices and the tariffs of electricity of the transportation of natural gas, of the prices of gasoline, etc. The government has also announced a number of bidding rounds that are historical by all means I would say in a global context. Why? Because the blocks that will be offered for companies including Pemex and our competitors or partners to bid for these blocks include not only exploration blocks which means these are areas that have not been explored and require a lot of risky investment but there are also blocks that are being put for offer that have existing reserves. So from a risk standpoint these are assets that have been derisk and offer enormous potential in the short term for investors. In Pemex we are encountering a number of challenges but we are tackling them one by one and I would say our biggest challenge is execution we need to transform the company in a relatively short period of time we need to change the strategy we need to change the structure and we need to change the culture of the company we have to execute hundreds of projects through alliances in the next 12 to 24 months. That is a lot, the company has never had such a challenge since its inception but the way that we are going about this and mitigating the biggest risks that I see which is implementation of all of these things at the same time is through partnerships finding world-class partners to mitigate the implementation risk that means we do not want to have overruns in costs we do not want to have delays in the projects that we are executing in drilling, in the construction of pipelines in the construction of refineries of petrochemical plants and most importantly Sergio, we do not have money for everything so we need capital to complement our efforts to make sure that the reform is implemented we are conscious about the historical role that Pemex will carry out in the next months and therefore we are not taking any risks on our own that we cannot execute on time and at cost so these are the three main elements the change in strategy we will be present only in those projects where we generate value or more clearly said where we make money and we will be less present in those areas that offer less returns but that are strategic to the company so as you rightly pointed out Pemex is transforming itself from a government agency into a corporation it does not happen overnight but we are committed to doing so and I think we are on the right track I remember Ignacio Sanchez Galán I remember that Iberdrola's corporate color was blue and now it is green, is that a signal to the people, to the consumers does that have anything to do with the vision of the future for energy? Well I think it is smiling because probably has been the most difficult decision I succeeded then the board approved to me so traditionally our color was blue because we were called hydro we were hydro from the beginning and the water is blue and when I decided to move to another renewable right wing I proposed to the board to move from green to blue from blue to green, it was terrific it took me three more meetings before it was approved I think the last one I came there and put the whole office in green color and the board the only thing could say to me is well okay we are said green but have to be the green alcantara said I don't know what the alcantara is green let's go, okay fine so we are already we think that our society we have a responsibility toward to live to future generation a world at least as good as this one we have already rotated and I think that is one of our goals that is on top of our agenda that is on top of our commitment and I think the things can be done in a manner the world has already a lot of resources and using the resources, natural resources in a certain manner we should be able to reduce drastically the emission we are already emitting to the atmosphere so we are now in the December of the year is a summit in Paris which is probably one of the latest opportunities that the world took seriously then the climate change is a fact so we as a company we are putting our dreams to try to facilitate this thing we have already signed on the World Economic Forum environment we have already signed 40 leaders 40 business leaders there is a commitment just to try to do so we as cyber dollars we have already committed ourselves to reduce even more our emission we are now 30% emitting less than average European average but we have already committed for 230 to reduce another 50% toward our emission in 2007 but I think green is a sign but the most important thing apart of the color is that we human beings we have a responsibility to give to our future generation a better world I think we have no right to destroy the things that we mean destroying just in a generation banning and doing things in a manner which is not efficient the world needs energy and we have to do the things using the energy but using the energy in the proper manner and I think all the energies are needed but we have to use the better technologies in such a way that these technologies with the energy efficiency we pollute it as less as possible and that is possible and that can be made already economically viable as well it's not a question to make technologies which are not absolutely very expensive which is already affecting to the competitiveness is able to be made the things with technologies which are enough mature in using models which that can happen and that is in my opinion one of the greatest opportunities of Latin America Latin America energy demand is going to multiply by four in the next 24 years that means that huge investment are needed and this investment can be made in a manner efficient environmentally economically or inefficiently and I think the opportunities to be efficient and I think I'll be delighted in Latin America takes the flag of we can be the greenest of the greenest we can be the most efficient environmentally because that would be a good example if not another nation is going to force then we move in this direction so that is the reason of the green Gonzales Estrada can we really be the the region of the world that has the banner that we're reducing energy we're doing it efficiently but we also do it in the most eco-friendly manner that is possible can we do that, can you do that in Colombia? I would start by saying that blue is green in Colombia 70% of electricity is generated through hydro it has been very useful for us in terms of managing these tensions that sometimes you get between environment and energy and I think we can really take advantage of the huge resources we have but we have to take into consideration a couple of things more the first is that we need to make sure at least that's the approach we've taken in Colombia that we let projects compete on their merit what we've seen is a dramatic reduction in costs for renewables, for non-conventional renewables and they will be able to participate without subsidies prices do send signals it's very important that we let projects compete on their merit because that's the most efficient and the most permanent way in which we can get renewables flowing and the other thing which has to do with renewables and with a huge problem we have here in Latin America is energy access the numbers I have in my head are roughly equivalent of Peru the population of Peru is the amount of people in the region that don't have access to electricity or to reliable sources of energy and in many areas, in remote areas in the region it's through renewables through the local renewables that are available that we will be able to secure this energy access so innovation and social investment need to partner in a way in which we can not only be green but we can have access for all Samir, prices of crude oil have dropped by 50% over the past year and a half is this affecting investment or is it just changing investment and what do you foresee for the future? The view on the energy prices on a longer term that is going to be higher than what it is of course today but of course what we have been seeing in the last nine months is an equilibrium in the supply and demand mainly driven first by what's happening in the US with the shale gas and the production in the US but also the geopolitical situation in the world which has a major impact on the supply and demand there is another factor which we should also think about is the Chinese consumption because in China the forecast in the past and the GDP growth has used to be between 7% to 8% over two decades and this has been a fantastic story but we do understand the economy in China today is almost triple what it used to be about some time back and the forecast for Chinese GDP growth is about now 6.8% which is lowering let's say the consumption and that is going to be changing the balance between the supply and demand and because of that we are seeing a lower oil price the view of the industry is that we are going to see a U-shaped recovery rather than a V-shaped recovery so we need to be patient I mean it's a gradual recovery it's a gradual recovery but I don't think it doesn't look like we'll be seeing prices above 70 or 75 dollars for the next couple of years depending on the geopolitical situation depending on what's going to happen in Russia for the European base what's going to happen in the situation for instance in Yemen, in Syria and Iraq whether that is going to be inflicting and increasing the conflict in the region whether Iran is going to open up or not whether the sanctions are going to be lifted because we can get quite a cheap oil actually and gas from Iran so there are a number of issues which are changing the equation the reforms which we are seeing today both in Mexico and Colombia this is a fantastic opportunity I mean if Emilio will deliver on what he said he's going to do he's going to double the production but we do understand also the same time that reforms are not easy reforms take time reforms require actually you need to have strong institutional and regulatory frameworks beyond that to work beyond the short cycle of the political mandate which we have and Emilio was speaking about cost he speaks about schedule he speaks about capital he speaks about technology but also the context need to be correct and if we are able to create a context in Latin America for instance in Mexico and Colombia and Brazil and Peru and many of the places in Latin America which is very rich actually in resources that can make miracles Emilio, Thomas was saying and I was very struck by it which is something everyone recognizes in the economic world but not everyone recognizes in the political world prices do send signals prices tell us what's working and what's not working we should allow projects to develop according to their merits Mexico has traditionally have controls or subsidies in oil prices and gasoline prices and all kinds of energy prices is this being faced out what can we expect in prices and are we going to see in Mexico a situation in which prices will speak for themselves and allow production to fluctuate or certain projects to be given precedence over all the projects well the law is very clear in this and this was part of the energy reform prices for gasoline and diesel will be liberalized fully liberalized by 2018 in terms of importation of products to Mexico and there's a transition to that that will go by very quickly and there's an important element to that Pemex needs to invest a lot in infrastructure to make sure that we as a country do not write off a lot of the investments that we have done in refining capacity but the most important part is and I agree costs need to send a signal when you speak about Mexico in this very difficult context for the global oil and gas producers Mexico offers a very good opportunity our oiling costs of production in Pemex which is more or less what other companies will face that will come and explore and extract oil and gas is $24, $25 per barrel oiling including exploration the drilling and the development of the infrastructure at current prices close to 60 the Mexican price of our oil in Mexico this offers a highly competitive environment to produce more energy and when we speak about Latin America, North America I am highly optimistic when you put into context the technology that Samir was referring that catalyzed a complete change in the shale oil and shale gas production in the US production has we have to look at the figures they used to produce in the United States 4.5 million barrels per day five years ago now they are above 9 million barrels per day it's a doubling of the production something that I don't recall anyone predicting it Mexico is highly competitive on conventional oil which is even more easy to extract than the non-conventional oil that they are extracting in the United States plus what Colombia is doing and what Brazil has done in terms of reforms at the end of the day I am highly optimistic about the development of Latin America and North America in terms of energy production but it will have a particular impact which is on productivity it's not about producing you don't need to think about the volumes of production it is about energy is used for transport energy is used to produce other products and at the end of the day the cost of natural gas for example in Mexico or in the United States is a third or a quarter of what other parts of the world are paying for and this is obviously Pemex will generate some value in the process but at the end of the day is the impact that it has on the local economy on the job creation and on the GDP creation on the country so that is what makes me very optimistic about both Latin America and North America including US and Canada Ignacio Galán I know in Mexico we've just had an energy reform that changes the rules not only in oil but also in electricity but you were working in Mexico before the energy reform how much do the rules change now? what are you going to be able to do now that you weren't able to do before and what sort of projects would a private company like yours Iberdrola be contemplating in Mexico? well I think we are here as I mentioned since 1999 we are in this moment several power plants roughly 15 between 15 and 20% of electricity produced in Mexico is produced in our power plants mostly these electricity is already sold to CFE but there are certain private customers as well that we are already selling that one what does it represent? I think this reform is a real revolution revolution in the sense of trying to do something in a hurry which certain countries have already taken decades for liberalization but they are already very good very good starting point is that Mexico as far as our experience always has already demonstrated that the legal certainty is a fact so whatever thing has already happened across this year always has already respect the terms or the agreements or the contracts we have already signed and that is a very good starting point because for investment we require 40, 50, 60 years a period before you recover the investment legal certainty is crucial I think the trial record of Mexico in energy has already been always maintaining and respecting the rule the second thing is that they are already making the thing in a progressive manner which is good so they are liberalizing the most industrial consumers into steps which I think that gave time for those people which are coming to do things in a let's say planifying manner another thing which is important planning is crucial in Mexico they are already this liberalization is on the way but it's a good planning they are already independent regulators they are already giving free access equal basis access to everybody to the network so they are doing the things in a point which I'm sure they are going to attract a lot of people to come here they are placed for everybody I think the competition is starting but I think it's a country the next few years will require investment they need to build on the size of 50,000, 60,000 megawatts so it means almost as much as most they have already today so they need to make a lot so they have room for everybody but the important thing is what they are already making in this reform is a very well designed is attractive and they are putting all the means which is required for investors to come into the country so I'm sure if we've been already in the previous period with all these rules I think we are much more satisfied with the existing rules but in the upcoming we are already ongoing investment range of 15, 16 billion pesos Mexican pesos of 1 billion dollars something else but I think our plan is almost to double the existing investment in the country to now we are 4, 5 billion invested and we plan we wish to at least double the size by the end of the decade and I think we are quite satisfied and we are very happy not only in terms of the legal framework but as well all the independent regulator has been established in this period which I think that's very good I'm surprised to hear that legal certainty that the rule of law is a major a major advantage of Mexico sometimes Mexicans we don't believe that although I guess if we look at other countries in Latin America we realize that there's more respect for agreements, is that what you're saying? Well I will not criticize another one I would like to say that Mexico really is respecting the rules which I think for investment when we take the decision to invest in a power plan this power plan is going to stand for 30, 40, 60 years so legal certainty, legal framework predictability, stability regulation is crucial for ourselves I think we are looking even more than one the profitability, I think we are expecting profitability but to predict profitability across 60 years it's almost impossible all the paper can resist anything but if you are not you have already a good trial record or legal respect of the rules so that is the main thing for attracting investment in our sector Sameer, I don't know how much work Annex Foster Wheeler has done in Latin America but what's your experience with Latin America what sort of problems do you encounter and what are the advantages of working in Latin America the plus and the cons of Latin America? Let me start with the cons maybe that effect a little bit more I mean of course we have been active across whole Latin America we have been having challenges definitely in getting paid in countries like Argentina and Venezuela I guess you are not the only ones I joined the team anyway it has been quite a difficult situation for us so that's a major problem for a company that's when Mr. Gallant speaks about legal certainties that's important that's very important for everybody because you would like to have the political stability you would like to have the economical stability you would like to have the fiscal stability you would like to have the rule of law to be there and you want to have a resolution which you are able actually to go to and find the solution on time and not to wait for too long in order that you can get the resolution and get your money out of the country if it's needed but that's on some of the challenges we have been having Brazil has been also a big challenge in the sense of building up the facilities in Brazil with a very high degree of local content while the actually manpower and the talent skills were not there so they were a little bit ahead of themselves which I think also is going to be challenged both in Mexico and also in Colombia because this is the two countries which we see are the rising stars actually in Latin America do they have the same kind of rules for local content in Mexico and in Colombia? well I mean I think they don't have the same rules as it is in Brazil but the thing is that what we need to be careful and we have been having a discussion quite a lot about in the transformation of many of the companies in Latin America what we need to do is that we need to have a very clear plan about how are we able to build the talent over time because if you will be going from 2 million barrel a day to 4 million barrel a day you will definitely need more firepower, you need more talent you need more skills but it will take some time to build up the skills because what you need to do first is to study engineering you need to get engineering schools to be able to deliver the right quality of engineers and then you need to be able to capture the engineers rather than going to the finance market and in order to be able to work as good engineers and they need to work for a number of years before they start to be productive and that's going to be a challenge in many places in Latin America as the growth is going to be on a very fast pace so we need to have a very clear plan about what does it take us in order to get there and how are we able to prepare on a face basis all the talent which we need Emilio, tell us about that what's the situation in Mexico with respect to talent I've been told that not only by Samir but by many people that the world's scarcest resource is talent in spite of the fact that we have widespread unemployment throughout the world is Pemex getting the talent the engineering talent that he should be getting in Mexico are schools good enough the public schools, the private schools the techs are they good enough are they providing sufficient number of engineers I fully concur with Samir on identifying the challenge of human capital as the most important one we will face maybe not in two years but surely in three, four, five years this will start to become a real issue Mexico has great engineering schools both public and private it is producing a large quantity of engineers but not necessarily with the skills that companies need as soon as they are employed so you need to invest a lot again in retraining them for whatever you need but needless to say as more companies come in the geology is generous both in Colombia and in Mexico and in Brazil so the talent market is global is not local either you build talent or you buy talent if you buy talent you push out the prices and we know but what about immigration laws in terms of Mexico has very restrictive immigration laws we ought to flexibilize them because at the end of the day you need to move the most critical one I would say Mexico has the right capacity we just need to work on an industry basis and not as a loner in making sure that we collaborate with the universities there is talent around but it is not being taught in what I would say a coherent and organized way we need to standardize the curricula of the universities so that we know what we are hiring and this is something that is used to be the only employer or the national electricity company so it was not a big issue but now that there will be a competition for talent this is going to become a problem you just need to look at Australia or some projects for example in Brazil where the cost of the project doubled or tripled because they did not find the right amount of people but that brings me back to the local content issue Mexico is one of the largest and most open economies in the world more than 65% of our economy is trade so in implementing the reform we have learned from other experiences that it is better not to put high restrictions, some ambitions in terms of constructing equipment making sure that some of the value of the equipment construction is carried out in Mexico but not putting such a high mark where you just escalate the cost of the project so my sense I leave this to the other participants is that local content loss that were approved as part of the energy reform are actually a non-issue because importing equipment to construct or implement large scale combined cycle projects or offshore projects actually it is much cheaper to produce part of the equipment here because energy is cheaper, gas is cheaper so I'm optimistic about that and at least from what I heard from other companies there is a risk that they foresee but the talent one is a problem Minister Gonzalez Estrada what's the situation in Colombia with respect to talent? it's always when you have such an increasing production remember we doubled production to a million barrels per day over the last five years this stresses the system in a lot of ways so there are requirements for talent of course there are requirements for local content communities in the ground and this is something Mexico will experience once you have lots of companies communities in the ground are going to demand and expect a lot from the projects that are carried out close to them and this is going to be a difficult thing to manage because you have to make sure the companies that operate follow standards that are acceptable and that are proper for all the licensing and the permitting system this is also something that can be stressed when you receive a lot of investment you will need to approve environmental licenses you will need to carry out community consultation processes so reform brings a lot of benefits it does bring a lot of benefits but it also requires a lot of effort from the government to be able to support the projects on the ground if you say I want investment because this will bring resources for investment this will bring energy this will secure a lot of things you need to be prepared to follow through in terms of policy not only in local content not only in talent but also in making sure the projects happen in the ground Ignacio Galana I understand Iberdrola has brought a lot of good engineers Spanish engineers or European engineers to Mexico but I understand they marry Mexicans and they stay in Mexico is that a gain or a loss I think I absolutely I agree with Emilia it was saying I think Mexico is in long time extremely good engineers I just already mentioned to you in some moment when is the university in 1972 yesterday you can imagine and at that time most of the books I was already standing in my engineering school were already books who has already either written in the technological Monterey or translated in the technological Monterey that we are using I think my learning in electric machine, my learning in external material my learning in switches has already come in from Monterey and I think in Mexican even certain words we are using the Mexican word relevadores the switches in we call interrupteres in Mexico they call relevadores we are using the word relevadores but I think in the point he mentioned I think the engineers here are very good our experience with the Mexican engineers are extremely good almost everybody in our company are engineers we are recruiting in this moment 68 new engineers I think we are already providing as he mentioned certain scholarship in certain European British and American universities for certain specialization but I think the electromechanical engineer which is our specialty which is produced here are extremely good such that one of the largest power plant we have already built in Middle East in Qatar has been mostly made by Mexican engineers so we are already these engineers are already the industry I'll see that industry in this country in the electromechanical industry is very good I subscribe and they are absolutely competitive in this industry in this country in very many fields such that in certain equipment we are sporting to another countries area like transformers for instance cable transformers are much cheaper produced here in Mexico than elsewhere in certain of our power plants in the world they are already using this Mexican equipment so I think it's a good people the universities are still maintaining a very high level for our specialty electromechanical which unfortunately in another country the United States is not in fashion so they are not very many electromechanical engineers they prefer to be already electronic or telecom so IT is engineers but the traditional electromechanical engineer and they are not very many here is maintaining that one and that is already using these engineers because really they are very good so I think that's positive in terms of specialization in certain particular fields it's true but I think the universities no one in the university in the world can already provide precisely what we require in particular moment in the industry and that's why we have already our training centers and that is why we spend a lot of money in training of all these guys but the basic training in this country the education engineering is very good I take note that you have a good view of Mexican engineers you didn't answer the question of whether your Spanish engineers were married Mexican women understand it is true but it could be the other way around it could be actually Spanish engineers, female engineers are marrying Mexican men it may be so it may be so what can we expect for the future the main issue here is the future of energy what can we expect let me start with you some here what do you expect this business to be in 10 years it's of course Mark Twain used to say never prophesy especially about the future but this time I want to put you on the spot what can we expect in the future of energy I think we do all agree that Latin America in the last decade has been sleeping in a way continent and from an economical point of view because you could not see any major GDP growth and I think now the world has changed quite a lot and Latin America have even changed even more so I think if I see what's going to happen in the next 10 to 20 years in Latin America because that's the question in energy of course Latin America in energy what can we expect let me take advantage of your expertise you're working all over the world so let me go through some of the technologies what I feel about the forecast in 2030 that the world is going to be depending one about 25% still on actually on coal-fired power plant coal-fired so that means Asia is becoming that's 19th century technology because it's continued to be the coal country for the next two decades because they've been making a major investment on coal-fired power plant now still they need to be rejuvenated and retrofitted in order to be able to meet the emission levels but still they will be online mainly driven in China and India so that's going to be about 25% is going to be coal about 19 to 20% is going to be oil so we will not be using oil as much as we've been using because oil is being used more now in the transportation sector rather than anything else I don't think there will be any power plants in 20 years from now running on oil it is only very few places where there is a remote area where you don't have any other solution the fuel which is going to be from a fossil fuel which is going to be the future fuel is gas gas is going through the roof now so we're going to go up gas is going to be using gas gas is going to be used in many different applications in the power generation mainly combined cycle power plants but also going to be used in the transportation sector because you look on today's on transportation for instance when it comes to vessels they will be using in the future LNG rather than actually using bunker C or oil even cars and trucks could be actually moving to gas so that's going to be different and then also with the gas networks that's going to be more used in the residential and also in the industrial so this is the three big ones now there is the three small ones Hydro is not going to increase it's going to be around the 8% this country has been a major hydro country if you think about Brazil, if you think about Colombia but Google Earth has already found all the rivers so we will not be able to be putting more hydro power plants we'll be improving maybe the hydro plants we'll be some mini hydro plants but it's not going to be big change so 8% on that level too nuclear is very been interesting some of the countries are going to be shutting down the nuclear applications we still have about some 400 units on operation on a worldwide basis the number of the units are going to increase only in five countries which are remarkable let's say increase others are not these are going to be in China this is going to be India, this is going to be Russia this is going to be also in Korea and in the US all other countries are not going to have a major nuclear some of them they will be shutting down and that will be leave at the 8% the biggest breakthrough through the technology and through because of the ecological stress is renewable energy wind has been the biggest one run in the last decade solar is now the new actually future our company has built about 15% of the solar plants in the US and we are going to continue to do that we have built 30% of the wind farms in Canada but that's only a tip of the iceberg this is going to move from 2% basis today to 8% on a worldwide basis that mean the growth on a yearly basis for the next two decades is going to be more than 100% year on year basis it's going to be interesting coal remains but on the other hand we have alternative sources of energy the floor is open for questions if you want to ask a question to the speakers as you've probably heard very good this is the time to do it I know people are intimidated by the cameras we have right here in the back and do we have a microphone there yes go ahead could you please tell us who you are yes hi my name is Perla Juan-Rostro from the International Center for Trade and Sustainable Development in Geneva I would like if you could please comment about the G20 pledges regarding facing out fossil fuel subsidies what's your position on that and the representatives from Latin American countries I come more from the trade world and for many years regional trade integration initiatives are there we will have a briefing on the Pacific Alliance what's your position or what are you discussing about integration in terms of energy in Latin America what's the future in that regard, thank you integration and the G20 promises anyone wants to tackle G20 has been extremely extremely audacious by saying that fuels can be reduced significantly what we're hearing from Samir is that virtually every source of fuel that we're using right now will still be in place within 10 years is that inevitable Emilio I think that Samir's view is very realistic obviously everyone in this room will probably aspire to have 20% of renewables in 20 years and the price are still not aligned it might but I think realistically hydrocarbons are going to continue to power the world for the next decades but hydrocarbons can be also much cleaner I put the example of Mexico and Ignacio also mentioned this Mexico is going through a tremendous transformation on the consumption of energy we are going from liquids basically oil to natural gas three times cheaper in terms of energy consumption and at least half as less polluting natural gas I put the example of Pemex what is the impact of going from hydrocarp from the liquids from oil to natural gas we are the largest consumer of electricity in the country with 6% of total demand today by being more efficient and deploying capital from third parties and substituting fuel oil to natural gas we will become a net supplier to the system of about 10% of total supply within 3 to 4 years it is phenomenal and when you talk about the reduction in emissions you don't need to to stop using hydrocarbons to actually reduce emissions that's basically it and the emissions are the emissions reduction of this program including the electricity company which is also substituting fuel oil to natural gas means as if you would take away various cities in Mexico and stop all the cars forever so the world could adapt to natural gas as Amir was saying and increase natural gas usage I point to China for example if China substitutes even mildly coal and stops consuming more natural gas you would see much cleaner cities evidently we would prefer to see more renewables but this will take time to invest in technology and when you talk about integration finally Mexico is also involved in what I would say one of the biggest transformations in the world in terms of energy integration we are building infrastructure already actually we inaugurated one pipeline and our fellow electricity company will inaugurate one at the end of this year that will fully connect the natural gas market from Mexico all the way down to Canada it's no longer one market in Mexico nor the American energy market and we're in discussions to also bring natural gas to Central America that would drastically drastically reduce the cost of energy from $20 a million of cubic feet of gas towards the 5, 6 depending on the cost of transportation so it means prosperity for the region so I'm highly optimistic about these two developments Minister Gonzalez Estrada any hope of more energy integration in Central America will we see an energy agreement between Venezuela and Colombia or is that too far fetched actually there are a lot of exchanges of energy exchanges between Colombia and Venezuela even when relationships with the two countries between the two countries were so difficult were so tough we never stopped buying and selling electricity and never stopped buying and selling gasoline between the two countries but there are two concrete examples of integration one is the connection the electricity connection between Colombia and Panama this is a project that has been going on at a good speed we have the two main things already settled in the table one is we know what's the infrastructure that needs to be built and secondly we have agreed on regulation which are the rules to buy and sell electricity if all goes well the first electricity should flow between 2018 this means that all the market in Central America will be connected to South America through Colombia and we are also advancing at a lower speed because this is harder connecting Colombia and Chile trying to sell electricity from Colombia to Chile they want to expand their mining with Colombia and electricity but we need to agree on how to buy and sell electricity between Colombia, Ecuador, Peru and Chile and this is proving difficult any other question from the floor anyone over here yes a microphone please this is Juan Carlos Guy from Ben & Company I want to pick up on the talent point and risk management this is an inherently risky industry and the question is what can with very aggressive targets of growth what can equipment manufacturers, service companies regulators and operators collaborate to actually deliver on those targets and manage the risk that is going to inherently do both on safety and environmental risk what do we do for risk Samir well I mean according to the World Economic Forum there is in why has made a very thorough studies about the projects which we are delivering in the world and they were monitoring all the project which has above 1 billion dollar mainly in the oil and gas industry and the findings are appalling the reason for that because we find out actually on a worldwide basis we are overrunning the budget with about 65% doesn't matter whether it is LNG or downstream or upstream of the business 75% overrun of the schedule so we have an issue so the industry in total did not deliver on the expectations which everybody should have or would have and the view forward is that we need to get much a better collaboration between all the parties which we have mentioned because if we don't get that collaboration we will be having an insane view about how the projects and how the risk are managed so today there is a much better discussion and need to happen between the different parties in order to understand what is want to be achieved what is the scope of supply what is the vision of work and responsibility between the different parties and what are the talents which are needed behind it and there have been a number of mistakes done and that mistake should be corrected one of the mistakes has been done from the operator point of view they felt we have done this job about 10 years back so add a couple of percent on it so what is the problem from the service industry we have been too lazy to inform actually our clients that this is not the situation look as a responsible and accountable service industry I need to be very clear about what is the new situation where do we stand on the supply chain and what do we need to do different than what we have been doing before we need to push more for simplicity in design more actually in using standardized design more modular design than what we have been doing look on so many facilities which we have in the North Sea in the UK, in the Gulf of Mexico we have thousands of facilities doing the same thing how does it look like everyone is different everyone is a bespoke design and that actually changes the whole risk picture and that needs to be changed we haven't touched the nuclear energy almost nothing at all Iberdrola manages a number of nuclear plants what is your view on nuclear is it safe? well it has already been demonstrated that it is a safe technology so I think the number if we compare the number of accidents nuclear with another technologies is by far the safest of all those ones I think you see problems the safest, that's not impressive but it's true I think if you see hydropower plants they already have already suffered disasters recently in Russia they have a tremendous problem because a dam breaks there are still hundreds of people so you see cold power plants they are already problems everyday accidents almost on a daily basis so all technologies has already risked, has already suffered in the case of nuclear the amount of money spent in securities such which that has never happened when something happened, I think it's tremendous noise it's not because of a nuclear accident in the case of Fukushima we have to remind that Fukushima was not a nuclear accident was already a earthquake earthquake and tsunami tsunami which already affected all the protection, they had already a protection of 10 meters to protect of the waves but nobody can expect a size of tsunami but it was a protection of that one but it was a nuclear accident saying that I think is the question of mentality so if the cities in certain countries they have already created a certain concern or a threat around so that is a reality but the fact is that they are really safe and what is the future? I think you mentioned I think still in the world there are a lot of countries which are already investing in nuclear power plants so in other countries they have already decided not to do so but I think my feeling is that it would like to have already achieved the target that most countries already fix in terms of emission reduction should be absolutely needed then this power plant, those one which are still in good shape remind open, the example of Belgium Belgium had already decided previous government to close the nuclear power plant now they are coming back saying please don't close keep that open for another 10 years at least why? because it's safest enough they are already demonstrated their reliability, they are already the cost is competitive it's a pity to not emission, it's emission free I do want to thank all of you for having participated in this debate I want to thank the audience as well both the audience here and the audience that has been watching us through the web and that is going to watch us in TV Azteca Ignacio Sanchez Galano Viverdrola Samir Virco, chief executive officer of Amic Foster Wheeler Tomás Gonzales Estrada minister of mines and energy of Colombia Emilio Lozoya chief executive officer of Pemex I am Sergio Sarmiento of TV Azteca this has been the whole discussion and believe me, I've learned a lot I hope you have too, thank you very much for listening to us