January 23, 2014
Infraestructura Energetica Nova (IENOVA*) SAB, the Mexican unit of Sempra Energy (SRE), is being forecast by analysts as a winner because of energy legislation that helps it extend last year’s growth and a 53 percent stock gain.
Ienova is expected to be an “early beneficiary” of the energy law enacted by Mexico’s President Enrique Pena Nieto last month that will allow foreign companies to produce crude in Mexico for the first time since 1938, Credit Suisse analysts led by Vanessa Quiroga said in a Dec. 16 note to clients. Opportunities to enter oil and natural gas transportation and storage as well as electricity transmission and distribution will probably keep driving Ienova shares, according to Curt Launer, an analyst at Deutsche Bank AG. He rates the shares a buy with a target price of 67 pesos.
The second part of Mexico’s energy law will be debated in congress next month. Secondary legislation will determine legal specifics for contracts of foreign oil companies entering Mexico such as Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX)
“Energy reform brings in new capital and new drilling and makes Mexico able to grow its own natural gas production,” Launer said in a Jan. 21 phone interview from New York. “Ienova is very well positioned to be the natural gas processor, to be the liquids processor, and the joint venture they already have with Pemex looks like it would be a big winner in any of those circumstances.”
January 17, 2014
Oil and Gas Journal, 01/17/2014
Mexico moved quickly once politicians there decided to adopt energy sector reforms, but the process’s second phase, which begins Feb. 1 and should be completed in 2 years, could be critical, an official of national oil companyPetroleos Mexicanos (Pemex) said.
“The reform which was approved was much more liberal than what President Enrique Pena Nieto proposed last summer,” Fluvio C. Ruiz Alercon, an independent director at Pemex, said in remarks during a Jan. 16 discussion at the Brookings Institution. “It was quite fast-tracked. There are deadlines now for Congress to legislate the second law, and some of the terms might change.”
The reforms’ main provisions, which will let the country’s oil and gas and electric companies work with the private sector for the first time since they were nationalized in 1938, probably won’t change much, he indicated.
January 16, 2014
Oil companies from Exxon Mobil Corp. (XOM) to Chevron Corp. (CVX) will have to wait another two years before investing an estimated $20 billion in Mexico’s recently opened oil and gas industry.
Foreign crude producers will be allowed to bid on fields for exploration and begin developing infrastructure and operations as soon as late next year, Deputy Energy Minister Enrique Ochoa said in an interview at the ministry in Mexico City. Prior to granting the operating licenses, the legal framework has to be determined and state oil producer Petroleos Mexicanos must select the fields it plans to continue to develop, he said.
December 16, 2013
The Wall Street Journal, 12/16/2013
Asian energy groups are looking at opportunities in Mexico following a decision to break Petróleos Mexicanos’s oil and gas monopoly, but they could face tough competition from Western rivals for the right to exploit the country’s huge and lightly developed reserves.
Mexico’s relatively stable political environment and geographic proximity to the U.S. could attract investors from there, including companies that have been selling stakes in Asian and African energy projects to focus on exploiting shale gas and oil opportunities nearer to home. Attractive Mexico projects could also interest European companies such as Spain’s Repsol, which is 9.3% owned by Pemex, and others already active in the country.
December 13, 2013
BBC News, 12/12/2013
The Mexican Congress has approved controversial legislation that opens the state-controlled oil sector to foreign investment.The new energy law allows private oil and gas companies to drill for oil and gas with the state-run firm Pemex in exchange for a share of the profits. It has been approved by the Chamber of Deputies a day after being passed by the upper house, the Senate.
December 13, 2013
Financial Times, 12/12/13
After being banished to an auditorium when leftist deputies hijacked the chamber, Mexico’s lower house of Congress passed historic energy reforms on Thursday designed to lure billions of dollars in investment to a sector shackled to the state for 75 years.
Cheers of “Mexico, Mexico” were met by chants of “traitors, traitors” from critics of the reform at the culmination of a rowdy session, which was switched to a crowded auditorium after opponents padlocked the chamber and blocked it with chairs in a bid to derail voting.
December 12, 2013
On the morning of December 12th, Mexico woke up to the sound of fireworks as the country celebrated the festival of the Virgin of Guadalupe. A national holiday, the 12th marks the beginning of the Christmas festivities in Mexico, which will end on the 6th of January with the Dia de los Reyes (Three kings day or Epiphany).
But for many in the energy industry, the fireworks and celebrations had a double meaning. The day before, the Mexican Senate and Chamber of Deputies approved a legislative initiative that reforms the country’s energy sector. As expected, the law includes measures to open the oil and gas industry to private and foreign investment, through cash, profit-sharing and production contracts. What is new, however, and is the result of the hard political bargaining that has taken place between the governing PRI and the PAN in recent weeks, is the legal entity of the “license”.
December 11, 2013
Mexico’s Senate approved an energy 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.
December 11, 2013
Houston Chronicle, 12/10/2013
Speaking to the annual conference of the Republican Governors Association, meeting in Arizona recently, Gov. Rick Perry was unrealistically optimistic when he predicted that this nation’s grinding debate over immigration reform is likely to end in the not-too-distant future, thanks to Mexico’s economic advances. Comprehensive immigration reform is much more complicated than that, and yet there’s a kernel of truth in the governor’s observations.
Perry spoke specifically of the effort by Mexican President Enrique Peña Nieto to reform his country’s energy laws to lure greater investment from outside oil and gas companies. The end result would be not only increased energy production but also more jobs for Mexicans.
December 11, 2013
National Journal, 12/11/2013
The new Capitol Hill budget plan clears the way for a U.S.-Mexico offshore drilling agreement to proceed, signaling the apparent end of a House-Senate impasse that has stalled implementation of the 2012 accord.
The agreement announced Tuesday evening between Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis. has language tucked into it that approves the U.S.-Mexico Transboundary Hydrocarbons Agreement. The bilateral drilling accord is designed to enable cooperation and legal certainty in the development of oil-and-gas along a maritime boundary in the Gulf of Mexico.