RPT-Fitch: Mexico’s energy reform positive for Pemex, challenges CFE

February 4, 2014

Energy -electricity_transmission_linesReuters, 2/4/14

Mexico’s energy reform is a long-term positive for the country and Petroleos Mexicano’s (Pemex) credit quality, while Comision Federal de Electricidad (CFE) faces margin pressures, according to a new Fitch Ratings report. ‘Fitch does not expect Pemex’s ratings to change due to the energy reform, but the company will benefit from the ability to find partners to share exploration risks and budgetary independence,’ said Lucas Aristizabal, Director.

Overall, the energy reform is a positive for Mexico’s competitiveness. Industrial and commercial electricity users with large enough loads to enter into bilateral contracts with independent power producers stand to see electricity costs decline as a result of the energy reform, assuming new generators are able to secure low cost natural gas from the United States or incremental gas production in Mexico. The rationale behind the ongoing energy reform is to attracting private investors in order to increase the country’s oil and gas production. Mexico has been severely underexplored, while production significantly decreased during the past decade, due to Pemex’s low investing ability. Mexico has estimated resources of approximately 159 billion barrels of oil equivalent (boe) with proved reserves (1P) accounting for 13.7 billion boe.

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Mexico energy bill to open power generation, sales to privates

December 9, 2013

logo-cfeBusiness Insight in Latin America, 12/9/2013

Mexico’s senate unveiled an energy bill Saturday (Dec 7) that would end the state monopoly over the power sector and open generation and sale of power to privates.

The bill, currently being discussed by senate committees, confirms the proposed power sector as laid out by energy ministry Sener’s head of electricity, Lourdes Melgar, in an August interview with BNamericas.

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Violence in Mexico’s Michoacan state leaves at least 7 dead

October 29, 2013

Latitudes Press.The Los Angeles Times, 10/28/2013

At least five people were killed in a spasm of violence that shook one of Mexico’s largest states over the weekend, authorities said Monday.

Gunmen on Sunday blew up 18 electrical substations — twice the originally reported number — and torched six gasoline stations in Michoacan state, just west of the nation’s capital. Nearly half a million people were left without electrical power for 15 hours.

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Mexico beefs up security after attacks on state energy firms

October 29, 2013

security mexicoReuters, 10/28/2013

Mexico has stepped up security in a troubled western region after a string of attacks on electricity installations at the weekend that temporarily knocked out power for hundreds of thousands of people.

Energy Minister Pedro Joaquin Coldwell told reporters security forces had increased their presence at facilities of the state-run electricity company the Federal Electricity Commission (CFE) and oil monopoly Pemex in the violent state of Michoacan.

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Mexico on high alert after attacks on state energy firms

October 29, 2013

Photo by Flickr user Frecuencias populares!!!Al Jazeera America, 10/28/2013

Mexico has stepped up security in a troubled western region after a string of attacks on electricity installations over the weekend that temporarily knocked out power for hundreds of thousands of people.

Energy Minister Pedro Joaquin Coldwell told reporters security forces had increased their presence at facilities of the state-run electricity company the Federal Electricity Commission (CFE) and oil monopoly Pemex in the violent state of Michoacan.

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Mexico forces kill two suspects in state energy firm attacks

October 29, 2013

logo-cfeReuters, 10/28/2013

Mexican security forces killed two people believed to be involved in a string of attacks on electrical installations at the weekend and captured three more, the government said on Monday.

An unspecified number of substations and gas stations were attacked and damaged early on Sunday in the troubled western state of Michoacan in an attack that temporarily knocked out power for hundreds of thousands of people.

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Experts urge an end to CFE’s power monopoly in Mexico

July 29, 2013

drawing bar chartBN Americas, 7/26/2013

The key to a comprehensive energy reform in Mexico is reconfiguring the power sector to end national utility CFE’s monopoly over the entire value chain, experts said at an energy reform debate hosted by Mexican think tank Cidac.

“My proposal is a constitutional reform of [amendments] 25, 27 and 28, the same as oil, because I’m convinced that the vertical monopoly that CFE has must be broken up,” said Rogelio López-Velarde, energy attorney at law firm López-Velarde, Heftye y Soria. First, he says, is to make power generation a truly competitive sector, which it nearly is already. Since 1996, 78% of the growth in the power generation sector has come from privates through independent power producer (IPP), self-supply and cogeneration schemes, he explained. The second step is converting CFE into a company that can list shares on the Mexican bourse BMV and can enter into JVs with privates. “The third step is to remove power transmission authority from CFE and put it in the hands of the state under a separate company, regulated by [power watchdog] CRE to avoid the conflict of interest we are seeing now,” López-Velarde said.

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Lower cost of wind energy encourages municipal governments to use it – #MexFacts

March 5, 2013

MexFact - Wind energy

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Nine Key Changes for Mexico [In Spanish]

May 2, 2012

Nexos, 5/1/2012

In its May edition, Nexos features nine articles that comprise a guideline for national change to: improve the education system, eliminate regressive subsidies, unleash Pemex, open the Federal Electricity Commission, punish violence, integrate the Army to civic life, have governments make responsible purchases, make social protection a universal right, and adequately invest in the development of babies.

This post features a summary of each of these nine articles and their proposals for improving Mexico.

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California company, 2 executives indicted on charges of bribing Mexican government officials

October 21, 2010

The Los Angeles Times, 10/21/2010

 

A Southern California company and two of its executives were indicted Thursday on conspiracy charges, accused of bribing government officials at Mexico’s state-owned utility in exchange for obtaining lucrative contracts.

Keith Lindsey, president of Lindsey Manufacturing Co., and Steve Lee, were each charged with eight counts, including conspiracy to violate the Foreign Corrupt Practices Act and money laundering. If convicted, they each face more than 50 years in prison.

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