Category: Mexico

The flood of North American crude oil is set to become a deluge as Mexico dismantles a 75-year-old barrier to foreign investment in its oilfields. Plagued by almost a decade of slumping output that has degraded Mexico’s take from a $100-a-barrel oil market, President Enrique Pena Nieto is seeking an end to the state monopoly over one of the biggest crude resources in the Western Hemisphere. The doubling in Mexican oil output that Citigroup Inc. said may result from inviting international explorers to drill would be equivalent to adding another Nigeria to world supply, or about 2.5 million barrels a day. That boom would augment a supply surge from U.S. and Canadian wells that Exxon Mobil Corp. (XOM) predicts will vault North American production ahead of every OPEC member except Saudi Arabia within two years. With U.S. refineries already choking on more oil than they can process, producers from […]

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Mexico ’s lower house passed an energy bill that ends Petroleos Mexicanos’s 75-year oil monopoly in a bid to attract foreign investment and boost growth. Lawmakers approved the bill in general terms in a 354-134 vote late yesterday and continue to discuss minority-party challenges to specific articles. If these are rejected, the initiative will be sent to Mexico’s states, where it’s likely to receive approval from more than half of the legislatures, the threshold for changing the constitution. The bill, passed by the Senate two days ago, would change Mexico’s charter to permit companies such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) to drill for oil for the first time since 1938. It would allow production sharing and licenses for outside companies that will also be able to log crude reserves for accounting purposes. Supporters say it will boost economic growth, while opponents say it will funnel […]

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Mexico’s Congress voted amid fistfights and shouts of "treason" to end the 75-year monopoly of the state-owned oil firm Petróleos Mexicanos. The landmark bill aims to open the door for foreign oil giants to return to one of the world’s biggest energy markets for the first time since 1938. The bill passed the lower house 354-134 just minutes before midnight Wednesday, a day after it passed the Senate, and on Thursday Congress cleared the remaining related articles. Proponents say the initiative will attract tens of billions of dollars in foreign investment, lift Mexico’s sluggish economic growth, and add to a North American energy boom that could lower costs for manufacturers across the region. The vote itself was high drama. Opponents from the leftist Party of the Democratic Revolution (PRD) tried to prevent discussion by blockading the entrances to the lower house’s main voting hall. Lawmakers from the ruling […]

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Every gas station in Mexico is stamped with the green-and-white logo of the state-owned oil monopoly, the economic lifeblood of the government. Oil Expropriation Day, commemorating the day Mexico seized control of the industry from foreign companies in 1938, is celebrated with speeches and even parades in some towns. An old song, “The Oil Worker Hymn,” credits oil with “saving our fatherland.” But now, in what could be the biggest economic change in two decades, President Enrique Peña Nieto is on the verge of rewriting the Constitution to open Mexico’s oil, gas and electricity industry to private investment — a provocative move expected to lure international oil companies and expand North America’s energy supply while testing the grip oil has on Mexico’s soul. “We must defend our oil,” Cuauhtémoc Cárdenas, a three-time presidential candidate and son of the president who nationalized the oil industry, […]

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After decades of inertia, the energy-reform proposal given general approval by the Mexican Senate late Tuesday goes even further than many had expected. The country’s rapidly changing energy relationship with its northern neighbor helps explain why. Mexico’s dismal decline in oil production, to 2.94 million barrels per day last year from 3.85 million in 2004, is the obvious impetus for trying to coax in more foreign money and expertise. But an even starker picture emerges when you look at Mexico’s overall energy trade in oil and gas with the U.S. Using trailing 12-month averages, Mexico’s exports of crude oil to the U.S. peaked at 1.63 million barrels per day in fall 2006. By August this year, that was down to less than 0.9 million barrels—a level last seen in the early 1990s. U.S. exports of crude oil are effectively prohibited, but that isn’t true for refined products such as […]

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After decades of inertia, the energy-reform proposal given general approval by the Mexican Senate late Tuesday goes even further than many had expected. The country’s rapidly changing energy relationship with its northern neighbor helps explain why. Mexico’s dismal decline in oil production, to 2.94 million barrels per day last year from 3.85 million in 2004, is the obvious impetus for trying to coax in more foreign money and expertise. But an even starker picture emerges when you look at Mexico’s overall energy trade in oil and gas with the U.S. Using trailing 12-month averages, Mexico’s exports of crude oil to the U.S. peaked at 1.63 million barrels per day in fall 2006. By August this year, that was down to less than 0.9 million barrels—a level last seen in the early 1990s. U.S. exports of crude oil are effectively prohibited, but that isn’t true for refined products such as […]

Click here to view full article at online.wsj.com

Mexico ’s lower house passed an energy bill that ends Petroleos Mexicanos’s 75-year oil monopoly in a bid to attract foreign investment and boost growth. Lawmakers approved the bill in general terms in a 354-134 vote late yesterday and continue to discuss minority-party challenges to specific articles. If these are rejected, the initiative will be sent to Mexico’s states, where it’s likely to receive approval from more than half of the legislatures, the threshold for changing the constitution. The bill, passed by the Senate two days ago, would change Mexico’s charter to permit companies such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) to drill for oil for the first time since 1938. It would allow production sharing and licenses for outside companies that will also be able to log crude reserves for accounting purposes. Supporters say it will boost economic growth, while opponents say it will funnel […]

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Mexico’s Senate passed an energy bill late Tuesday that may end a 75-year-old monopoly held by state-owned oil company Petroleos Mexicanos. The bill allows private companies to drill for oil and gas through flexible contracts and licenses. Private companies have been kept out of oil and gas production–except for those working under contract to Pemex. The bill gives private companies a share in oil production in return for taking all the exploratory risks. It allows them to book reserves as expected cash flow. The Senate passed President Enrique Pena Nieto’s energy reform bill by 95-28. Several articles were reserved for further debate but no significant changes are expected. The bill now goes to the lower house which is expected to pass it this week. The end of Pemex’s monopoly is seen by some as the biggest economic change in Mexico since the North American Free […]

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Mexico’s Senate passed an energy bill late Tuesday that may end a 75-year-old monopoly held by state-owned oil company Petroleos Mexicanos. The bill allows private companies to drill for oil and gas through flexible contracts and licenses. Private companies have been kept out of oil and gas production–except for those working under contract to Pemex. The bill gives private companies a share in oil production in return for taking all the exploratory risks. It allows them to book reserves as expected cash flow. The Senate passed President Enrique Pena Nieto’s energy reform bill by 95-28. Several articles were reserved for further debate but no significant changes are expected. The bill now goes to the lower house which is expected to pass it this week. The end of Pemex’s monopoly is seen by some as the biggest economic change in Mexico since the North American Free […]

Click here to view full article at online.wsj.com

Mexico ’s Senate approved an energy overhaul bill that supporters say will make the country the world’s fifth-largest oil producer in about a decade, spurring growth in Latin America ’s second-biggest economy. Mexican senators passed the bill in general terms 95 to 28 last night to permit foreign companies such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) to drill for national oil for the first time since 1938. Senators are still debating the bill’s specifics and can make amendments before sending it to the lower house. The plan would change the constitution to allow production sharing and licenses for outside companies that will also be able to log crude reserves for accounting purposes. Mexico is the world’s ninth-largest oil producer, according to the U.S. Energy Information Administration, and possesses the biggest unexplored crude area after the Arctic Circle. Industry analysts and the bill’s authors say the overhaul […]

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