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Drug Gangs Attacking With Tanks Block Mexican Shale Boom

e Oil shale drillers in Texas have had to contend with environmental opposition and soaring costs. A few miles south of the border in Mexico, Angel Torrez and co-workers duck gunfire sprayed from drug traffickers. When gunmen pulled up in April in a makeshift tank and riddled the Hotel Asya with bullets, Torrez dropped to the floor. After the attack, the 21-year-old machine operator for Weatherford International Ltd. and his crew of about 30 left town under police escort. Ciudad Mier, in the gas-rich region along the Texas border known as the Burgos Basin, had already become a ghost town after most of its inhabitants had fled following years of bloodshed. “My girlfriend says she doesn’t want me here,” Torrez said as he rested on a bench outside his new hotel […]

Posted On : Published By : Tom Whipple
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Americans oil giants are looking to partner with Mexico's Pemex.

The miracles of modern engineering and, specifically, fracking and deepwater drilling are rapidly changing the risk-reward assessments of petroleum investment. When OPEC members meet in Vienna next week, the organization is scheduled to offer its latest assessment of global demand and projected production. And closer to home, U.S. oil titans are aligning with Mexico’s Pemex to secure access to new crude oil. As I reported in an earlier post , there’s good reason for Mexico’s newfound optimism and popularity. At the time, Pemex, the state-run oil monopoly and world’s fourth largest producer, had just discovered three deep-water deposits in the Gulf of Mexico, with an estimated 26.5 billion barrels of crude oil. And there’s no doubt about the high quality of that crude. So it shouldn’t have surprised anyone when California-based Chevron quietly became the first major international oil producer to partner with Pemex following landmark legislation that Pemex […]

Posted On : Published By : Tom Whipple
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Americans oil giants are looking to partner with Mexico’s Pemex.

The miracles of modern engineering and, specifically, fracking and deepwater drilling are rapidly changing the risk-reward assessments of petroleum investment. When OPEC members meet in Vienna next week, the organization is scheduled to offer its latest assessment of global demand and projected production. And closer to home, U.S. oil titans are aligning with Mexico’s Pemex to secure access to new crude oil. As I reported in an earlier post , there’s good reason for Mexico’s newfound optimism and popularity. At the time, Pemex, the state-run oil monopoly and world’s fourth largest producer, had just discovered three deep-water deposits in the Gulf of Mexico, with an estimated 26.5 billion barrels of crude oil. And there’s no doubt about the high quality of that crude. So it shouldn’t have surprised anyone when California-based Chevron quietly became the first major international oil producer to partner with Pemex following landmark legislation that Pemex […]

Posted On : Published By : Tom Whipple
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Pemex Reducing Repsol Stake as Mexico Prepares Oil Open

Petroleos Mexicanos is looking to strengthen its balance sheet with the sale of a stake in Repsol SA for about $3 billion as Mexico ’s state-owned producer prepares to form partnerships with foreign oil companies. Pemex, as the Mexico City-based company is known, is selling a 7.9 percent stake in Repsol, according to a Citigroup Inc. filing to the Spanish stock exchange yesterday. Citigroup and Deutsche Bank AG (DBK) are conducting the sale. The Mexican company is raising cash from the sale as lawmakers prepare regulations to open the oil industry to foreign investment for the first time since 1938. Pemex was “very disappointed” in Repsol’s performance, Chief Executive Officer Emilio Lozoya said in an Oct. 31 interview. “If Pemex is going to be restructured as a new company, it needs a nest egg of capital in its balance sheet,” George Baker, an energy consultant […]

Posted On : Published By : Tom Whipple
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Exxon gets first crack at U.S.-Mexican maritime border area

Exxon Mobil won the first three oil and gas leases for an area straddling the U.S.-Mexican border in the Gulf of Mexico, the U.S. Interior Department said. Exxon gets access to nearly 1.5 million acres in the Gulf of Mexico. The U.S. Interior Department estimates the area, Alaminos Canyon, contains as much as 172 million barrels of oil and 304 billion cubic feet of natural gas. The transboundary area was opened by congressional agreement in December. Through it, U.S. companies agree voluntarily to develop the area jointly with Mexican energy company Petroleos Mexicanos. "These leases represent a significant step forward in U.S.-Mexico cooperation in energy production and pave the way for future energy and environmental collaboration," U.S. Interior Secretary Sally Jewell said in a Saturday statement . The Interior Department’s Bureau of Ocean Energy Management sold the three leases areas in March for a total of […]

Posted On : Published By : Tom Whipple
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Oil-Tinged Graft Scandal Roils Mexico

Over the past decade, Amado Yáñez Osuna gained a reputation throughout Mexico as a highflying CEO with good political ties. He turned up at events with prominent ruling-party members, and lent his private jet to party officials. But then the party lost power. On Thursday, officials arrested Mr. Yáñez and charged him with violating banking laws. Authorities say his company, oil services firm Oceanografía, defrauded Banamex, the Mexican unit of U.S. banking giant Citigroup , of about $400 million. Citigroup has already fired 12 employees in Mexico for failing to detect the alleged fraud, which was tied to alleged fake documents from state-owned oil firm Petróleos Mexicanos, or Pemex. The arrest deepens a scandal that has sent shock waves across Mexico’s political landscape. That […]

Posted On : Published By : Tom Whipple
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Mexico’s energy ministry projects rapid near-term growth of natural gas imports from U.S.

Source: Mexican national energy ministry SENER, 2013 natural gas market prospectus Note: All pipeline imports are from the United States. Gross imports equal net imports beginning in 2013. Logistical pipeline imports are imports from the United States to regions of northern Mexico that have no access to any other sources of natural gas. PGPB is the natural gas subsidiary of national oil company Pemex. A combination of higher natural gas demand from Mexico’s industrial and electric power sectors and increased U.S. natural gas production has resulted in a doubling of U.S. pipeline exports of natural gas to Mexico between 2009 and 2013. Mexico’s national energy ministry, SENER, projects that U.S. pipeline exports to Mexico will reach 3.8 billion cubic feet per day (Bcf/d) in 2018. This would be more than double U.S. pipeline exports to Mexico in 2013, which averaged 1.8 Bcf/d . This projected growth is driven mainly […]

Posted On : Published By : Tom Whipple
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Mexico's energy ministry projects rapid near-term growth of natural gas imports from U.S.

Source: Mexican national energy ministry SENER, 2013 natural gas market prospectus Note: All pipeline imports are from the United States. Gross imports equal net imports beginning in 2013. Logistical pipeline imports are imports from the United States to regions of northern Mexico that have no access to any other sources of natural gas. PGPB is the natural gas subsidiary of national oil company Pemex. A combination of higher natural gas demand from Mexico’s industrial and electric power sectors and increased U.S. natural gas production has resulted in a doubling of U.S. pipeline exports of natural gas to Mexico between 2009 and 2013. Mexico’s national energy ministry, SENER, projects that U.S. pipeline exports to Mexico will reach 3.8 billion cubic feet per day (Bcf/d) in 2018. This would be more than double U.S. pipeline exports to Mexico in 2013, which averaged 1.8 Bcf/d . This projected growth is driven mainly […]

Posted On : Published By : Tom Whipple
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Pemex in Talks for $4 Billion Investment Fund With China

Petroleos Mexicanos , the state-owned oil producer, is negotiating with Chinese companies to create a fund valued at as much as $4 billion to invest and finance projects. The proposed arrangement is in a “final stage of negotiations,” Pemex, as the Mexico City-based oil producer is known, said in an e-mailed statement yesterday, correcting an earlier filing that said a deal had already been signed. The Sino-Mex Energy Fund would be the largest Chinese investment fund in Latin America , according to the earlier statement sent to the Mexican Stock Exchange. The prospective agreement between Pemex’s international unit PMI Comercio Internacional and Xinxing Ductile Iron Pipes (000778) , SPF Capital Hong Kong Ltd. and other Chinese companies would be used to finance large-scale projects and create jobs. Pemex is seeking to increase sales to Asia and Europe to offset falling oil exports to the U.S., Mexico’s largest crude buyer. […]

Posted On : Published By : Tom Whipple
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U.S. petroleum product exports to Mexico rise while Mexican crude exports to the U.S. fall

Note: The United States does not export crude oil to Mexico. The United States imported 850,000 barrels per day (bbl/d) of crude oil from Mexico in 2013, the lowest volume since 1993. In the past decade, U.S. crude oil imports from Mexico fell 47%, primarily as a result of declining production of crude oil in Mexico. Despite the decline, Mexico was the third largest source of crude oil imports to the United States in 2013, behind Canada and Saudi Arabia. Conversely, U.S. exports of petroleum products to Mexico have increased 152% in the past decade. In 2013, the United States exported 527,000 bbl/d of petroleum products to Mexico, including motor gasoline (46% of the total), distillate fuel oil (22%), and liquefied petroleum gases (10%). While the United States is a net exporter of petroleum products to Mexico, the United States also imports some petroleum […]

Posted On : Published By : Tom Whipple