Category: Mexico

The Mexican government’s surprise decision to strip state-owned oil producer Petroleos Mexicanos of $3.4 billion is raising alarms for bondholders LM Capital Group LLC and Investment Placement Group. The Finance Ministry said Dec. 26 that it took the money, reducing cash holdings at the company known as Pemex to a 12-year low of 48 billion pesos ($3.3 billion). Returns on Pemex’s benchmark bonds due 2022 beat the emerging-market average last year, delivering 6.6 percent to investors on speculation that the country’s effort to lure private investment to the energy industry will reduce the company’s tax burden. To LM Capital and Investment Placement Group, the move is a cash grab by the government to offset a drop in revenue from the company amid a plunge in oil prices and the 10th straight year of declining output. During the first 11 months of 2014, taxes paid by Mexico City-based Pemex declined […]

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Production-sharing contracts for shallow-water exploratory blocks in Mexico will be granted for 25 years, Deputy Energy Minister Lourdes Melgar said. The 14 contracts will each have two renewal options of five years, Melgar said today in Mexico City. Terms for other development blocks will be announced in January, she said. The terms come a day after Mexico authorized bidding guidelines for new offshore blocks as the country prepares for investment in its newly opened energy industry. Before crude slumped below $60 a barrel for the first time in five years, Mexico had forecast private investment would bring in more than $50 billion by 2018. Mexico’s oil monopoly, held by state-owned Petroleos Mexicanos since 1938, ended last year after President Enrique Pena Nieto approved a bill to allow foreign producers to drill. Companies will pay 30 percent income tax on the shallow water blocks, Deputy Finance Minister Miguel Messmacher said […]

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Gas is flared from a tower on an oil drilling rig operated by Petróleos Mexicanos… ENLARGE Gas is flared from a tower on an oil drilling rig operated by Petróleos Mexicanos in the Gulf of Mexico. Bloomberg News MEXICO CITY—The recent plunge in oil prices is prompting Mexico’s government to consider scaling back the initial bidding for its momentous plans to reopen its oil and gas industry to private companies, and to offer them better terms. The government is now likely to delay or scale-down tenders for some of the oil fields and areas that it planned to offer in the coming months, especially in areas with shale oil where recovery costs are higher than in traditional oil fields, Energy minister Pedro Joaquín Coldwell said late on Thursday. He said the auctions for deep-water fields were unlikely to change because they were longer-term investments, but that other fields with […]

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Analysis Two years into Mexican President Enrique Pena Nieto’s six-year term, the premier has managed to pass contentious energy reform legislation that will allow foreign energy firms to operate independently inside the country. The government will award the first of these contracts in the opening half of 2015, marking the start of an ambitious effort to revitalize Mexico’s lagging energy sector. For foreign energy companies, 2015 will be an introduction to Mexico’s complex security environment and to its shifting constellation of transnational criminal groups, commonly referred to as cartels. Mexico’s state-owned energy company, Petroleos Mexicanos, or Pemex, and its various contractors are already keenly aware of the risks these groups pose. These risks have intensified in recent years as organized crime groups have sought to diversify their operations beyond drug trafficking, expanding into fuel theft. Crime groups have the capacity to organize hydrocarbon theft on a massive scale across […]

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MEXICO CITY— Royal Dutch Shell PLC has some natural advantages as it looks at Mexico’s opening to foreign oil firms in exploration and production, including a 20-year partnership at a Houston oil refinery with national oil firm Petróleos Mexicanos and decades of experience producing oil and gas on the U.S. side of the Gulf of Mexico, the company’s Upstream Americas Director Marvin Odum said on Thursday. Shell operates oil fields in the deep waters of the Perdido Fold area on the U.S. side of the Gulf, not far from an area on the Mexican side of the waterway where Pemex, as Mexico’s national oil company is known, has found significant resources and is looking for partners. “We basically built, developed and operate the Perdido development,” said Mr. Odum. “That, potentially, is an advantage in these circumstances. We bring not only a broad set of skills but a very specific […]

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MEXICO CITY—Mexico’s national oil company Petróleos Mexicanos, or Pemex, announced a $4.6 billion reconfiguration of its Tula refinery on Wednesday, saying the project was a better deal than moving forward on a new refinery nearby that had a price tag of at least $10 billion when it was proposed in 2008. Pemex CEO Emilio Lozoya said the Tula upgrades are part of a $20 billion package of refinery projects that include reconfigurations of the Salamanca and Salina Cruz refineries and previously announced work to upgrade all of the firm’s six refineries to produce cleaner diesel. The Tula project will increase gasoline and diesel production at the refinery to 300,000 barrels a day from the current 160,000 barrels, Pemex said in a statement. Separately, construction firm Empresas ICA said its ICA Flour joint-venture had signed a $1.3 billion contract to build a coker plant at the Tula refinery as part […]

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By Anthony Harrup MEXICO CITY–Mexico’s peso fell Friday to its weakest level against the U.S. dollar in more than two years as the continuing decline in world oil prices pressured commodity-dependent currencies. As the most traded of the emerging-market currencies, the peso is often used by investors to hedge emerging market exposure and sold off in times of global financial turmoil. Already under pressure along with other emerging market currencies on prospects of higher U.S. interest rates, the Mexican currency lost further ground after the Organization of the Petroleum Exporting Countries decided against cutting crude oil output to address falling prices. The Mexican currency weakened as far as 13.96 to the dollar during Friday’s session before settling back to 13.9080, its weakest close since mid-2012. The drop in oil prices, and the lack of liquidity because of the U.S. Thanksgiving holiday, were pressuring the exchange rate, local currency traders […]

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Mexico City (Platts)–10Nov2014/402 pm EST/2102 GMT A plan by Mexican state-owned Pemex to build a $6-billion natural gas liquefaction plant at Salina Cruz on the country’s Pacific Coast has been met with skepticism by analysts. The aim of the project is to cash in on the wide differentials in natural gas prices between Asia and North America. Speaking at a conference in Houston, Alejandro Martinez, director-general of the Pemex Gas subsidiary, said that the gas would be transported by a planned natural gas pipeline linking Pajaritos on the Gulf of Mexico and Salina Cruz on the Pacific Coast, a distance of some 120 miles. "The aim is to take advantage of our country’s geographical location and the business opportunities offered by the market conditions," Martinez said last week in a Houston presentation to potential project investors. "The natural gas that we produce in the Gulf of Mexico can be […]

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Home | News & Analysis | Latest News Headlines | US to exchange crude with Mexico as exports climb to 1 million b/d: Citi Washington (Platts)–7Nov2014/508 pm EST/2208 GMT The US is expected to export more than 1 million barrels a day of crude oil and condensates by early next year, including roughly 200,000 b/d in light-for-heavy crude exchanges with Mexico, analysts with Citi said in a new report. According to Citi’s estimates, US crude oil exports to Eastern Canada will grow 500,000 b/d, exports from Alaska will climb to 100,000 b/d, exports of processed condensate will hit 200,000 b/d and exports to Mexico will grow to 200,000 b/d from zero. Those Mexican exports will likely be done, at least initially, under exchanges in which the US Commerce Department allows a barrel-for-barrel trade of light crude exports for heavy crude imports, analysts said. "In the case of Mexico, there […]

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LA MURALLA IV, Gulf of Mexico — The computer screens lining the bubblelike control room on this giant floating platform monitor pressure levels in a narrow shaft cut through bedrock to a reservoir of valuable natural gas three miles below sea level. For six months, an international team hired by a contractor for Petróleos Mexicanos, Mexico’s state-owned oil monopoly, has been drilling an exploratory well here. Now, the work is nearly done. Drill pipes are stacked like sentries. An underwater robot has been pulled back up from the deep seafloor. A wireline sensor is gathering data to determine how much oil and gas lie below. An operation like this would attract little attention in the northern part of the gulf, where dozens of deepwater platforms are part of the mosaic fueling America’s energy boom. On the Mexican side, though, the search is just beginning . Pemex is counting on […]

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