January 24, 2014
Fox News Latino, 01/24/2014
Iranian President Hassan Rouhani has made a concerted effort to reach out to Western powers during his trip the World Economic Forum this week, highlighting the Islamic Republic’s need for greater energy ties with Latin America – even broaching the topic of alleviating the country’s tense relations with the United States. The main focus of Rouhani’s trip to Davos was to woo foreign investors to Iran, which has a market of around 76 million people and some of the largest gas and oil reserves in the world.Earlier in the week the chief of the Iran-Mexico Parliamentary Friendship Group met with the head of the Mexican Senate’s Foreign Relations Committee, Gabriela Cuevas Barron, in Tehran to discuss the expansion of energy ties between the two nations and in other parts of Latin America. For its part, Mexico appears open to the idea of growing its relationship with Iran, despite the country’s poor relations with Mexico’s closest ally, the U.S.
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 16, 2013
The flood of North American crude oil is set to become a deluge as Mexico dismantles a 75-year-old barrier to foreign investment in its oilfields. Plagued by almost a decade of slumping output that has degraded Mexico’s take from a $100-a-barrel oil market, President Enrique Pena Nieto is seeking an end to the state monopoly over one of the biggest crude resources in the Western Hemisphere. The doubling in Mexican oil output that Citigroup Inc. said may result from inviting international explorers to drill would be equivalent to adding another Nigeria to world supply, or about 2.5 million barrels a day.
That boom would augment a supply surge from U.S. and Canadian wells that Exxon Mobil Corp. predicts will vault North American production ahead of every OPEC member except Saudi Arabia within two years. With U.S. refineries already choking on more oil than they can process, producers from Exxon to ConocoPhillips are clamoring for repeal of the export restrictions that have outlawed most overseas sales of American crude for four decades.
December 13, 2013
The Mexico Institute’s “Weekly News Summary,” released every Friday afternoon summarizes the week’s most prominent Mexico headlines published in the English-language press, as well as the most engaging opinion pieces by Mexican columnists.
What the English language press had to say…
This week’s news outlets centered in the Energy Reform approved by both the Mexican Senate and Chamber of Deputies. 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, as a Forbes article explains, is the legal entity of the “license”. Although the legislation still explicitly prohibits the use of concessions in the hydrocarbons sector, the license will act in a very similar way, with the idea that it will be applied to unconventional projects like shale. The Economist noted that, as a consequence of the Reform, financial markets reacted with a burst of enthusiasm absent for most of the year, although it also claimed that the potential benefit from the reform will depend on the strength of secondary legislation that will specify what contracts will be offered for which type of oil or gas field, and what royalties and taxes the government will take. Finally, The Global Post noted that there were still political hurdles to overcome and that it will take a while before Mexico finally sees the investments and technology it needs to improve capacity and modernize Pemex.
On another topic, several news outlets highlighted stories concerning border issues. KPBS noted that U.S. and Mexico officials joined together on Tuesday in San Diego to signal construction crews to begin work on a $700 million border infrastructure project. The goal of the new freeway, and eventually a new port of entry, is to increase the $54 billion worth of goods that move across the Tijuana – San Diego Region by cutting border wait times that exceed two hours. The New York Times published a story describing how, even when agents do their jobs professionally and well, current immigration policy fosters insanity and menace in the Southern Border. It argues that when migrants have no hope of visas, the Border Patrol’s job is made harder while the drug lords get richer. On another note, the San Diego Union Tribune published a piece stating that the unprecedented spending of the U.S. government on border security has led to a nearly nonstop stream of reports, audits and studies criticizing how some of that money has been spent. Customs and Border Protection has acknowledged errors but also insists the unprecedented boost in spending has made the border far more secure.
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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.