Category: Mexico

Reforms embraced by Mexican President Enrique Peña Nieto could transform regional energy landscape, experts told a House subcommittee. File Photo by UPI/Photo by Dennis Brack WASHINGTON, July 24 (UPI) — The opening up the Mexican energy sector under the Peña Nieto administration could bring profound changes to regional energy security, experts testified. A subcommittee on the Western Hemisphere in the House Foreign Affairs Committee heard testimony about the impacts of Mexican President Enrique Peña Nieto’s decision to open Mexico up to private investors after more than 70 years under a monopoly controlled by state-run Petroleos Mexicanos, or Pemex. "In hydrocarbons production, the completion of these reforms gives the United States, Canada and Mexico an opportunity to make North America a new foundation for global energy security," Carlos Pascual, a former U.S. ambassador to Mexico and senior vice president for consultant firm IHS, testified. The government recently auctioned off rights […]

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Pemex has given conflicting statements about how much output was cut. In an e-mailed response to questions on July 8, Pemex reiterated its 1.5 million-barrel estimate. In a follow-up e-mail on July 10, the company said Bloomberg’s 4.2 million-barrel calculation was also “in the order of Pemex’s estimates” and didn’t provide details to explain the difference when asked in additional messages. At the heart of the confusion appears to be what, exactly, Pemex means by lost output. The production isn’t “lost,” Pemex says, just “deferred.” “It seems like Pemex is using a word game to avoid calling production lost,” said George Baker, an oil analyst and publisher of Mexico Energy Intelligence. “If production is being deferred after an accident, then that means the infrastructure isn’t in place or in good enough condition to pump the oil, so wouldn’t that be the same thing as lost production?” It’s not the […]

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Busting When Everyone Else Is Booming Mexico is about to undergo its first subsea land rush. International energy producers that sat out Mexico’s historic oilfield auction this week will be among the fiercest competitors for potentially massive deepwater prospects that go up for sale as soon as next month, said Ivan Cima, Wood Mackenzie Ltd.’s head of Latin American upstream research. Unlike Wednesday’s government auction, which involved 14 close-to-shore fields holding at most a few hundred million barrels of crude each, the tranche of prospects Mexico is expected to offer in August includes more promising geologic structures, Cima said in an interview on Thursday. The blocks are near the line that divides U.S. and Mexican waters of the Gulf of Mexico and close to some of the most significant discoveries of the past 15 years on the U.S. side, Cima said. “Those are capital-intensive projects that are certainly geared […]

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Exxon Mobil Corp., Chevron Corp. and the French oil giant Total SA opted out of Mexico’s historic oil auction because the fields are too small. None of the 14 shallow-water prospects in the Gulf of Mexico holds more than 384 million barrels of crude, according to Mexico’s National Hydrocarbons Commission. That’s far short of the billion-barrel finds prized by major international oil producers, said Fadel Gheit, a New York-based senior analyst at Oppenheimer & Co. “Shallow water is the minor leagues and these companies want to play in the major leagues,” Gheit said on Wednesday. “Deepwater is where the major leagues are. The shallow waters have already been picked dry.” The U.S. and European explorers that abstained from the first round of bidding Wednesday also probably balked at some of the financial and contractual terms insisted upon by the Mexican government, Gheit said. Any terms that would have crimped […]

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Mexico’s first auction of offshore oil leases fell short of the country’s expectations as several majors decided not to participate and only two of 14 blocks received qualifying bids. Exxon Mobil Corp., Chevron Corp. and Total SA passed on the 14 shallow-water oil blocks auctioned by Mexico Wednesday in the country’s first-ever sale of territory in the Gulf of Mexico, 77 years after seizing energy assets. The 14 percent success rate was less than half the 30 percent to 50 percent goal that the government said would be its minimum for judging the auction a success. The auction was the first in a series that will help determine whether Mexico can reverse a decade-long decline in crude output and fulfill President Enrique Pena Nieto’s pledge to double the pace of economic expansion. The output drop and an almost 50 percent plunge in oil prices during the past year had […]

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Success of auction for permits for offshore Mexico may test oil sector reforms announced last year by Mexican President Enrique Peña Nieto. File Photo by Dennis Brack/Pool/UPI MEXICO CITY, July 14 (UPI) — Australian media reports Tuesday energy companies there are among the early victors in the first round of auctions for exploration permits offshore Mexico. Australia’s BHP Billiton and Woodside Petroleum each prequalified as bidders for the first round of auctions for permits to explore the shallow Mexican territorial waters of the Gulf of Mexico, the first in more than 70 years. Neither company offered a statement on the approval. Deutsche Bank energy analyst Paul Young told The Sydney Morning Herald deepwater permits, expected on the auction block next year, were among the "most promising and anticipated acreage" offers in the region. Mexican President Enrique Peña Nieto last year set a goal of producing 3.5 million barrels of […]

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MEXICO CITY—Former Mexican finance minister Pedro Aspe has an unusual collection on the walls of his offices here: stock and bond certificates from some of the Mexican oil companies that existed before the industry was nationalized in 1938, creating the monopoly Petróleos Mexicanos. The more than 170 such companies that existed at the time had names, such as Co. Lluvia de Oro, or Rain of Gold Co. “Many of these companies were subsidiaries of foreign capital, but there was a Mexican oil industry too. And that’s what we want to recreate,” said Mr. Aspe, a senior managing director of Evercore Partners Inc. and head of the U.S. investment-banking advisory firm’s Mexican unit. Now, as Mexico opens its oil industry to competition for the first time in nearly 80 years, Mr. Aspe is one of several Mexican businessmen who have financed or helped create homegrown oil companies . Mexico plans […]

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Mexico waited 77 years to invite foreign oil producers back into its borders. That was one year too many. The move to lure tens of billions of dollars from the likes of Exxon Mobil Corp. will be put to the test for the first time at an oilfield auction on Wednesday. With oil prices down by about half since last year, five of 38 potential bidders, including Glencore Plc, Noble Energy Inc. and even Mexico’s state-owned oil producer, have pulled out. President Enrique Pena Nieto moved to end the state monopoly after poor drilling infrastructure and technology failed to reverse a decade-long production decline that reduced government revenue. To lure investments now, Mexico will probably get a much smaller share of profits than it would have a year ago. “They shaped expectation at a $100-per-barrel market and we are way off that now,” Wilbur Matthews, chief executive officer of […]

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Mexico’s president Enrique Pena Nieto. Photographer: Susana Gonzalez/Bloomberg Mexico President Enrique Pena Nieto’s credibility on law and order was damaged this weekend by the prison escape of the nation’s most famous drug trafficker. Now he’s about to be tested on his pledge to attract private investment to the flagging oil business and help revive the economy. On Wednesday, the government will hold the first in a series of petroleum auctions that will help open the energy industry, bringing in an estimated $62.5 billion by 2018 and increasing annual output by 500,000 barrels a day. The exploration and production contracts, the first since then-President Lazaro Cardenas nationalized the fields in 1938, will end the monopoly of state-owned Petroleos Mexicanos, or Pemex. The success of the auctions also will determine whether Pena Nieto, 48, can reverse a decade-long decline in crude output and fulfill his pledge to double the pace of […]

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