April 18, 2014
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.
April 8, 2014
The Wall Street Journal, 4/7/14
Mexico produced a record number of cars and light trucks in the first quarter of the year, with exports rising to an all-time high thanks to a recovery in U.S. demand after a harsh winter, an industry trade group said Monday. The Mexican Auto Industry Association, or AMIA, said Mexico produced 774,731 light vehicles in the first three months of the year, a 6.5% increase from the same period of 2013. March output rose 16% from the year-earlier month.
The unprecedented first-quarter output follows four consecutive years of record production in cars and light trucks, which reached almost three million units in 2013. Auto exports also set a record in the first quarter, rising 8.6% to 606,204 vehicles, with March shipments up 13% from a year before. Exports to the U.S., Canada and Latin America rose, while exports to Europe and Africa fell, according to the industry group.
February 25, 2014
LA Times, 2/24/14
The first Honda Fit rolled off the assembly line Friday at a new $800-million factory near Celaya, Mexico, a symbol of the growing might of the country’s auto industry.Honda’s U.S. factories spit out hundreds of thousands of Accords and Civics each year. But when the automaker redesigned the Fit for North America, it turned to Mexico for an increasingly skilled workforce and favorable export rules.
Mexico already accounts for about 18% of North American auto production, but that’s expected to jump to 25% by 2020 as automakers pour billion of dollars into factories, said Joe Langley, an analyst at IHS Automotive. The nation has joined Germany, Japan and the U.S as one of the heavyweights of auto production, he said.
February 4, 2014
Mexico’s energy reforms will create “abundant opportunities” for U.S. energy companies and shrink the socioeconomic disparities between Texas’ booming metro areas and its border cities, according to the latest BBVA Compass research. “The 2013 reform promises to create abundant opportunities for private companies that have the technology and expertise to revive Mexico’s hydrocarbons and electricity industries,” BBVA Compass economist Marcial Nava wrote in his report on the reforms.
Under the reform, the state would retain ownership of hydrocarbons beneath the surface and Petroleos Mexicanos (PEMEX) and Comision Federal de Electricidad (CFE) would not be privatized. However, the new legal framework would allow the ownership of hydrocarbons at the wellhead through profit-sharing, production sharing and license sharing contracts. BBVA Compass estimates that the reform could increase private direct investment inflows into Mexico by $20 billion to $30 billion per year, or 1.5 to 2.3 percent of Mexico’s gross domestic product. While secondary laws are still needed to translate the reforms into a workable framework and legal processes, U.S. oilfield services, shale gas and infrastructure companies, among others, stand to benefit from the reforms, Nava said in the Jan. 22 report.
February 3, 2014
The New York Times, 2/3/14
In the past, Mexico’s revolutions and internal wars have all been eruptions stemming from deep social problems. They unleashed enormous destructive power and took decades to run their course. But they were always followed by long periods of peace and economic development. The country’s present social unrest has a different source and is of a different nature. If the sweeping economic reforms of 2013 attract investment and are implemented efficiently and honestly (two bigs ifs), the major remaining obstacles to real social progress will be the powerful force of organized crime and the weakness of legal and practical measures to stem it.
Since democracy came to Mexico in 2000, the country has sunk into a cycle of violence fed by intense criminality. Images circulating on social media starkly depict its horrific cruelty. It is true that narco cartels and other organized crime groups (with allies in high political positions) have grown vastly stronger since the 1970s. But no one foresaw the paradoxical cause of their huge expansion: the limits set by democracy on the formerly near-dictatorial power of the president.
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
Intolerance of sexual diversity remains common across much of Mexico and Latin America, a strongly Catholic region where macho attitudes prevail. Yet the region has seen rapid change in recent years. Democratization, an increased respect for human rights, the onset of globalization and the growth of social media have all facilitated the expansion of lesbian, gay, bisexual, transgender and queer (LGBTQ) rights across the region. Argentina legalized same-sex marriage in 2010, and Brazil and Uruguay followed suit in 2013. The three countries are the only ones in Latin America to be named among the top 30 most gay-friendly nations in the world, as determined by LGBT travel website Spartacus World.
Mexico, meanwhile, is in the middle of a radical transformation. In 2009, Mexico City became the first Latin American jurisdiction to legalize marriage and adoption by same-sex couples, but the rest of the country is still playing catch-up with the liberal capital. A 2010 Supreme Court ruling means marriages registered in Mexico City are recognized everywhere, but same-sex ceremonies remain outlawed in most of the country and only a limited number have been allowed in five of Mexico’s 31 states.
January 28, 2014
Oil & Gas Journal, 1/27/14
International oil and gas companies keenly await more details as Mexico’s Congress drafts and debates secondary laws to implement its recently passed energy reforms. Opinions vary on whether Mexico can meet the deadlines it scheduled for secondary laws and the creation of various regulatory groups. On Dec. 21, 2013, Mexico’s sweeping energy reform became law, representing the most significant overhaul of Mexico’s oil, gas, and electric industries since 1938. Many ambiguities have yet to be resolved, various energy attorneys and consultants told Oil & Gas Journal.
Secondary legislation will stipulate contract logistics and tax reforms as Mexico ends the state-owned monopolies of oil company Petroleos Mexicanos (Pemex) and electric company Comision Federal de Electricidad (CFE). Companies outside Pemex are to be allowed to participate in exploration and production activities, breaking the decades-old Pemex monopoly. The reforms also will allow direct private investment in Mexico’s midstream and downstream.
January 27, 2014
Epoch Times, 1/27/14
Last year’s debate on immigration reform centered on discussions on improving border security for the nearly 2,000-mile border between the United States and Mexico by adding new fencing, more electronic detection technology including drones, and beefed-up numbers of security patrol. These concerns to secure the border presume that large numbers of Mexicans are highly motivated to leave their homeland, come to the United States, and never leave. A new study challenges that assumption.
“The U.S./Mexico Cycle: End of an Era” concludes that the days of massive legal and illegal immigration from Mexico have ended and are not likely to return. Hence, it is called “the end of an era,” according to Aracely Garcia-Granados, executive director of Mexicans and Americans Thinking Together (MATT), which conducted the study in collaboration with Southern Methodist University. The study confirms what a Pew Hispanic Center study first reported in 2012: The net emigration of Mexicans to the United States has slowed if not reversed, and that many Mexicans residing in the United States are going back home in historic numbers.
Garcia-Granados spoke at the Wilson Center on Jan. 14 and Jan. 17 to report preliminary results on the study that was released in December 2013. If you were not able to attend the event, you can watch the webcast at bit.ly/19Xlvtr.
January 24, 2014
Abc News, January 24, 2014
“Drink the water.” It’s a suggestion alien to Mexico City residents who have long shunned tap water in favor of the bottled kind and to the throngs of tourists who visit the city each year, bringing with them fears of “Montezuma’s Revenge.” But a law recently approved by Mexico City’s legislators will require all restaurants to install filters so they can offer patrons free, drinkable water that won’t lead to stomach problems and other ailments.
“We need to create a culture of water consumption,” said Dr. Jose Armando Ahued, health secretary for Mexico City. “We need to accept our water.” Bad tap water accounts in part for Mexico being the world’s top consumer of bottled water and — worse — soda, some 43 gallons per person a year. With an obesity epidemic nationwide, the city’s health department decided to back the water initiative.