March 4, 2014
The chief executive officer of Mexico’s state-run oil company Petroleos Mexicanos invited the world to explore for shale deposits in its recently opened energy sector. “Mexico holds about the sixth largest shale gas reserves in the world,” Emilio Lozoya said in a speech yesterday at the CERA energy conference in Houston. “You’re more than welcome to come and join the exploration opportunity,” he told a crowd of representatives from the world’s largest energy companies, such as Chevron Corp. and Exxon Mobil Corp.
The crude production monopoly held since 1938 by Pemex, as the state-run company is known, ended on Dec. 20. Pemex aims to attract as much as $1 trillion in energy investment during the next decade to exploit the biggest proven oil reserves in Latin America after Venezuela and Brazil, he said.
February 26, 2014
Oil & Gas Journal, 2/24/14
Mexico’s government realizes it’s crucial to establish competitive contract terms and effective, transparent regulations to attract international investors as Mexico implements its pending energy reforms, panelists told a Houston gathering on Feb. 7. Lourdes Melgar, the new undersecretary of hydrocarbons for the Mexican Ministry of Energy, spoke to a seminar hosted by the University of Texas at Austin and the Atlantic Council in Houston on the day after she was named to her current post. Previously, she was undersecretary of electricity.
Having worked on the Mexican government’s energy reform team, Melgar noted that energy reform has been discussed for years in her country. She has held various positions in Mexico’s Foreign Service, including design work on international oil market strategy. ”It’s important to Mexico’s people to make sure we have financial transparency in every contract and bidding round,” Melgar said. Secondary legislation will outline the basics for the types of oil and gas exploration and production contracts, which will be flexible, she said.
February 25, 2014
Thomas Reuters Foundation, 2/25/14
Just down the road from the old smokestacks, the biggest solar power plant in Latin America is poised to gradually replace outdated dirty power capacity with clean energy sourced from the sun. The mayor of this sunny state capital, Esthela Ponce, says the Mexican president is expected to pay an inaugural visit to the solar farm soon, ushering in a new era of renewable energy for La Paz and the rest of the country.
Built on the site of an abandoned agricultural operation, the solar farm is linked via a high-voltage transmission line with the local-area power grid at the Olas Altas substation 3 km to the south, to which it began supplying power in September. Aura Solar I is Mexico’s premiere utility-scale photovoltaic (PV) power producer, as well as the first domestic private enterprise of its size to obtain both a development bank loan and an agreement to sell its electricity to the grid.
February 25, 2014
The Wall Street Journal, 2/24/14
The Mexican government is shaking up its roster of officials who will oversee the opening of the energy sector, and one of the biggest changes will be the transformation of a tiny agency into a powerful regulator in charge of billions of dollars in oil and gas contracts, according to government officials familiar with the situation.
The shake-up of energy officials comes after Congress passed sweeping changes in energy laws in December that will allow private investors into the oil, gas and electricity sectors after decades of government domination, potentially drawing major international oil companies to what experts consider an underdeveloped market.
In recent weeks, President Enrique Peña Nieto replaced the head of the government electricity utility, Comisión Federal de Electricidad, and that was followed by the resignation of the director of oil production at state monopoly Petróleos Mexicanos, or Pemex, who held the key post for a decade.
February 24, 2014
The keenly awaited fine print that will flesh out a landmark Mexican energy reform will not require state oil giant Pemex to take minimum stakes in contracts and will set out national sourcing requirements, leading lawmakers said on Wednesday.
Mexico’s Congress in December approved the reform that ends Pemex’s 75-year monopoly on crude production and aims to attract significant new streams of private investment into the country’s lumbering oil, gas and electricity sectors.
“Pemex will participate (in future exploration and production contracts) if it wants to participate,” said Marco Antonio Bernal, who heads the energy committee in the lower chamber of Congress and belongs to President Enrique Pena Nieto’s ruling Institutional Revolutionary Party.
February 11, 2014
The Wall Street Journal, 2/7/14
The director of the exploration and production division of Mexico’s state-owned oil company Petróleos Mexicanos resigned Friday, and a deputy director was tapped to take over as the oil-and-gas monopoly gears up to face private competition for the first time in 75 years.
Carlos Morales, 59, had run the powerful production division at Pemex for a decade during a time when the company reached peak crude-oil production of about 3.4 million barrels a day in 2004. Oil output has since fallen to 2.5 million barrels a day primarily because of the steep decline of its Cantarell field.
Pemex, as the company is known, said that Chief Executive Emilio Lozoya lauded Mr. Morales for his 30 years of service. The deputy director of planning and evaluation for the production division, Gustavo Hernández García, 55, will take over Mr. Morales’s post on an interim basis, Pemex said.
February 4, 2014
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.
February 3, 2014
Tens of thousands of people have marched in Mexico City to protest against constitutional reforms pushed through by President Enrique Pena Nieto to open the oil and gas industry to foreign investment. An estimated 65,000 people gathered for the protest on Friday in the Zocalo – a main square in the capital city – an official at the Secretariat of Public Safety told the AFP news agency.
The march was organised by the Party of the Democratic Revolution (PRD), the leftist opposition to the president’s ruling Institutional Revolutionary Party (PRI).
January 29, 2014
As Mexico moves to open its energy sector to international companies, the new investments and increased activity could mean a bonanza for border towns on both sides, attracting as much as $1.2 trillion in economic activity to the region in the next decade, according to a BBVA Compass economist.
The Mexican energy reforms are a series a series of constitutional changes passe din December that ends the monopoly of Mexican oil company Pemex and opens all segments of the energy sector to private firms. Mexico’s congress currently is debating the supporting rules that will provide key information on how the new policy will be implemented and regulated.
January 28, 2014
Mexico’s Energy Reform establishes relevant regulatory and administrative changes with regard to environmental protection that may have a significant impact on the operations of private parties participating in the energy sector. Through the amendment of articles 25, 27, and 28 of the Mexican Constitution, the Decree opens up the possibility for private parties to participate in the Mexican energy sector, specifically in activities related to: (i) the generation and commercialization of electric energy and (ii) the exploration and extraction of oil and other hydrocarbons.1
As a result, both the Federal Electricity Commission (Comisión Federal de Electricidad or “CFE”) and Petróleos Mexicanos (“PEMEX”) transform from decentralized operations to productive state companies whose objective is “creating economic value and increasing the Nation’s income,” activities that now will have to be done in cooperation with other public and private companies. In that respect, the Energy Reform contains significant environmental elements to be developed within the next months with potential impact for the private sector, which are generally described below.