Allegiance Capital Corp. will establish an office in Monterrey, Mexico to capitalize on the potential oil and gas boom that could occur there in the next few years, the company told the Dallas Business Journal Friday.
The Dallas-based investment banking firm will send Marcelo Sada, a native of Monterrey, to lead a team of five employees as they help U.S. companies invest and break into the Mexican energy industry.
Allegiance specializes in mergers and acquisitions, including oil and gas service companies. The Monterrey office will be up and running by October, Sada said.
“I want to bring all my network and everything from Mexico and offer it to U.S. investors,” Sada said. “You have many companies that do not do business abroad. And they’re doing it for the first time. It can be overwhelming and a bunch could fail.
Mexico recently approved major energy reforms that open the country up for foreign oil and gas investors for the first time in 75 years. Before that, state-run Pemex had a monopoly on oil and gas development.
The reform, approved earlier this month, has already changed the country’s oil forecast by up to 75 percent.
The change was largely driven by Texas’ success in drilling for shale oil and gas. Pemex lacks the expertise to go after unconventional shale plays, paving the way for big opportunities for North Texas companies that do have this knowhow.
That includes companies that provide hydraulic fracking services, water services and manufacturing.
The country could open prospective drilling leases up for bids as soon as summer 2015.
“We think that with all the energy reforms that things will start moving quickly by the end of 2015 and by 2016,” Sada said. “I think we’ll see a lot of activity from international companies. That’s when we think the real boom is going to spark.”
The team will include bankers who are familiar with Mexican business to help guide American companies.
“It’s really important being part of the culture, knowing how business is done in Mexico and we have insight in all of that,” Sada said.
Marcelo Sada will lead Allegiance Capital’s new location in Monterrey, Mexico