Previously known as one of the world’s most polluted cities, Mexico City is cleaning up its act, starting with Plan Verde (Green Plan). This 15-year initiative began in 2007, and is backed by the United Nations and the World Bank. Plan Verde aims to set aside approximately 8% of the city’s annual budget for implementing extensive and ambitious initiatives to make the city more environmentally friendly. These initiatives cover many topics of sustainability, but the main focus is on improving air quality and reducing traffic. Environmental awareness has been expanding throughout Mexico as efforts are made to preserve water supply, increase renewable energy production, and protect endangered species. Mexico City is leading the country in its environmental endeavors.
President Barack Obama’s administration on Monday sided with American steel producers in a politically charged international trade dispute, ruling that imported steel reinforcing bar from Mexico and Turkey unfairly undercuts U.S. prices.
The preliminary decision by the U.S. Department of Commerce means companies in Mexico and Turkey will be subject to immediate duties. Within a week, the U.S. government will stop distribution at the nation’s borders of the imported steel reinforcing bar, which is known as steel rebar and is used to reinforce concrete, until a cash bond or deposit is posted in the amount of the newly imposed duties. U.S. Customs and Border Protection may impose retroactive duties for up to 90 days before the ruling due to the seriousness of the violations, Commerce said.
The amount of duties ranges from 10 percent to 66 percent for Mexican companies. For Turkish companies, the duties were roughly 2 percent.
Mexico’s peso volatility dropped for a sixth day as investors awaited the presentation of proposed regulations to put into effect constitutional changes that were enacted to support growth.
Three-month historical volatility, a measure of the peso’s fluctuations during the period, declined to 9.2 percent today, according to data compiled by Bloomberg. The peso appreciated 0.2 percent to 13.0301 per U.S. dollar, the biggest advance against the dollar among the greenback’s 16 most-traded counterparts.
Investors are waiting for President Enrique Pena Nieto to propose rules for implementing constitutional changes to open the energy industry, which his administration predicts will boost growth by 1 percentage point by the end of his term. Finance Minister Luis Videgaray had said he wanted the measures, known as secondary laws, to be presented and passed by next week, when the current congressional session ends.
The geological marvel known to Texas oilmen as the Eagle Ford Shale Play is buried deep underground, but at night you can see its outline from space in a twinkling arc that sweeps south of San Antonio toward the Rio Grande. The light radiates from thousands of surface-level gas flares and drilling rigs. It is the glow of one of the most extravagant oil bonanzas in American history, the result of the drilling technique known as hydraulic fracturing, or fracking. Curving south and west, the lights suddenly go black at Mexico’s border, as if there were nothing on the other side.
A landmark energy bill approved by Mexico’s Congress in December is aimed at correcting this disparity. It has opened the country’s oil industry to private and foreign investment for the first time in 75 years, with the goal of bringing in new technology, expertise and a risk-taking culture long missing at the state oil monopoly, Pemex.
Lawmakers will be hashing out the nuts and bolts of the law over the coming weeks, but expectations are that U.S. and other global companies will be able to bid on oil and gas projects by the end of this year, beckoning the fracking crews across the border — into some of Mexico’s most violent areas.
In the next two weeks, Mexico’s lawmakers are expected to release a series of laws, known as the secondary laws, that should begin to delineate how the revolutionary energy reforms approved last December will be implemented.
Prior to the reforms, Mexico had the most closed energy regime of any country in the world, save North Korea, some have quipped. This Latin perestroika is not going unnoticed in the US and abroad. It has become de rigeur at nearly every oil and gas conference to have at least one panel to discuss the changes, and with good reason.
Not only is Mexico close, the opportunity is huge. The country is prospective for 54.6 billion barrels of oil equivalent in conventional resources, and 60.2 billion in unconventional, according to PEMEX figures. And don’t forget NAFTA. Although Mexico’s energy industry had been excluded under Chapter 6 of NAFTA, that exclusion may no longer apply given the reforms, said Dallas Parker, a partner with Mayer Brown, during a presentation at Mergermarket’s 6th Annual Energy Forum last week in Houston.
The North American Development Bank has begun disbursing two loans totaling $140m to build a pair of 126MW wind farms in Mexico.Ventika 1 and 2 investors include Mexican cement and aggregates giant Cemex and Fisterra Energy, a company controlled by funds managed by Blackstone.
The energy produced will supply facilities belonging to FEMSA, DEACERO, Tecnológico de Monterrey and CEMEX. The Ventika wind farms are located in the municipality of General Bravo, Nuevo Leon, about 100 miles east of Monterrey. Acciona Energía is building the projects under engineering, procurement and construction contracts, as reported by reNews.
French energy company GDF Suez said Friday it signed a memorandum of understanding to develop natural gas prospects in Mexico. Gerard Mestrallat, chairman of GDF Suez, signed the measure Friday with Emilio Lozoya, his counterpart at state-owned Petroleos Mexicanos, known also as PEMEX.
“For GDF Suez, the signing of this memorandum illustrates the participation of our group in developing energy infrastructure in Mexico,” Mestrallat said in a statement. “A central part of our strategy is to accelerate our presence in fast growing markets, and Mexico is clearly a very attractive one.”
PEMEX said in a separate statement the deal with the French energy company lays the foundation for the development of technology that would help curb climate change through energy efficiency efforts and the overall reduction of greenhouse gases.
Mexico’s peso posted its biggest weekly drop since January as the country’s political parties wrangled over rules for opening up the energy industry, fueling concern that so-called secondary laws may be delayed. The currency weakened 0.3 percent this week to 13.0425 per dollar according to data compiled by Bloomberg. It was the biggest weekly slump since Jan. 24 after the peso rose 0.2 percent today.
While analysts surveyed by Bloomberg had forecast that the peso would gain an emerging-market best 3.6 percent this year as growth in Latin America’s second-biggest economy quickened, the currency is little changed this year as expansion flounders. Juan Bueno, a lawmaker from the opposition National Action Party, known as the PAN, said in an interview this week that his party hadn’t yet reached an agreement with President Enrique Pena Nieto’s government on oil regulators
For the last few years, the challenging security situation has been the headline issue in Mexico. Turf wars between increasingly-fragmented cartels—enfeebled by the capture or killing of high-profile kingpins—not to mention the recent proliferation of vigilante groups, have overshadowed the remarkable progress that President Enrique Peña Nieto’s government has made on other fronts. Last year, Peña Nieto forged a broad political consensus around a set of revolutionary constitutional reforms touching everything from the country’s economy to its educational system to its fiscal management. Reforms to the energy sector have generated particular excitement, opening the door to foreign participation in the country’s energy industry and raising hopes of a new round of growth that will benefit Mexico and foreign investors alike.
These are indeed exciting times for Mexico, but as we explain in a new report, any exuberance about the country’s prospects should be tempered by the hard work that lies ahead. The coming months and years will see the country turn its state-run oil, gas and electricity monopolies into market-driven enterprises and establish new independent regulatory bodies to oversee these industries. Any challenges to the new order will play out before the country’s notoriously fickle judiciary. And there will certainly be challenges: from the staunchly opposed labor unions, political opponents, and any companies who feel they’ve lost out.
Breitling Energy CEO to Deliver Keynote Presentation Discussing the Future of Mexico’s Energy IndustryApril 8, 2014
Breitling Energy Corporation BECC (the “Company”), a Dallas-based oil and gas exploration and production company, announced today that its CEO Chris Faulkner will participate at the Petroleum Exhibition and Conference of Mexico (“PECOM”) held between April 8 – 10, 2014 in Tabasco, Mexico. Mr. Faulkner will present the closing Keynote presentation on April 10 at 7p.m. local time entitled “The Big Four Resource Plays: An Update from the United States and the Pathway Forward for Mexico.”
Chris Faulkner, Breitling Energy CEO, said, “Mexico is entering a new era of energy exploration as it opens its borders to foreign investment and looks for unconventional oil and gas assets.” Faulkner added, “The prolific Eagle Ford shale extends deep into Mexico and could be the game changing catalyst they need in order to increase domestic production after decades of decline.”