Mexican Oil Giant Pemex Looks to Reverse Decline

October 20, 2014

10/17/14 Wall Street Journal

energy - oil barrelsWhen Mexico’s energy overhaul was signed into law in August, Emilio Lozoya, the chief executive of Petróleos Mexicanos, set a goal for the state oil giant that until recently would have seemed unrealistic: to regain its position as Latin America’s biggest company. For Pemex, as the company is known, that means leapfrogging Brazilian oil major Petróleo Brasileiro SA, or Petrobras, which holds the top spot in sales and has expansion plans of its own. Petrobras has been the star of the region’s oil sector for over a decade due to its technical expertise, growing oil production and international portfolio. Pemex’s crude production, meanwhile, has fallen for 10 years straight as the company’s shallow-water fields declined and much of its investment budget went toward squeezing more oil from older fields.

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Pacific Rubiales Gains on Pact With for Mexican Ventures

October 20, 2014

10/17/14 Bloomberg

gas pipeline and gaugePacific Rubiales Energy Corp. (PREC) signed an agreement with Petroleos Mexicanos to study oil and natural gas ventures as Mexico opens its energy sector to private investment for the first time in 76 years. The Bogota- and Toronto-listed company entered into a three-year arrangement with state-owned Pemex to analyze potential projects including deep-water and onshore heavy oil ventures, Pacific Rubiales said today in a statement. The shares fell 1.7 percent to 29,200 pesos at the close of trading in Bogota after earlier surging as much as 7.9 percent. “We expect Mexico will be a significant driver of future growth for Pacific Rubiales,” Chief Executive Officer Ronald Pantin said in the statement.

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Don’t Mess With Saudis in Oil Bear Market Global Shakeout

October 16, 2014

10/16/14 Bloomberg

energy - oil barrelsLower oil prices may lead to less of a bonanza for Mexico as it ends a 76-year-old state oil monopoly and opens up to private investment, according to Marco Oviedo, chief economist in the Latin American country for Barclays Plc. The nation is set to hold its first round of auctions next year for oil production contracts that’s forecast to attract nearly $13 billion of investment a year through 2018, according to the Energy Ministry. It will also offer joint ventures with state-owned Petroleos Mexicanos. “Mexico is going to have a very, very important round-one bidding process in just a few months,” Marcelo Mereles, a former Pemex executive who’s now a partner at EnergeA, an energy consultant, said in a phone interview from Mexico City. “ The lowered oil prices could cause bidders to be less aggressive and or shy away from investing in Mexico immediately.”

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Citigroup’s Mexico Unit Fined $2.2 Million Over Loan Controls

October 16, 2014

10/15/14 Bloomberg

finance-market_dataCitigroup Inc. (C)’s Mexico subsidiary was fined 30 million pesos ($2.2 million) by the nation’s bank regulators, which faulted the firm for inadequate controls and making loans that violated lending rules. The regulator known as the CNBV announced the penalty in an e-mailed statement today. Banamex said in a separate statement that it paid the sanction and is working on corrective measures. Citigroup, the third-largest U.S. bank, said in February that it had discovered the Banamex unit had made bogus loans to Oceanografia, forcing the New York-based company to cut previously reported earnings for 2013 by $235 million. Banamex had advanced funds to Oceanografia secured by promises that state-run Petroleos Mexicanos would repay the bank for work the oil-services firm performed.

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Mexican cartels steal billions from oil industry

September 25, 2014

09/25/14 The Washington Post

Oil barrelsMexico overcame 75 years of nationalist pride to reform its flagging, state-owned oil industry. But as it prepares to develop rich shale fields along the Gulf Coast, and attract foreign investors, another challenge awaits: taming the brutal drug cartels that rule the region and are stealing billions of dollars’ worth of oil from pipelines. Figures released by Petroleos Mexicanos last week show the gangs are becoming more prolific and sophisticated. So far this year, thieves across Mexico have drilled 2,481 illegal taps into state-owned pipelines, up more than one-third from the same period of 2013. Pemex estimates it’s lost some 7.5 million barrels worth $1.15 billion.

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Competition will force Pemex to come up with slicker act

September 24, 2014

09/23/14 Financial Times

pemex2Wanted: sharp new image for septuagenarian Mexican company with loyal following and the kind of brand recognition many companies would kill for. It sounds like an advertising agency’s dream. But the company in question is widely believed to be bloated, corrupt and inefficient. Its ability to maintain its market share in future is by no means guaranteed, and though it faces immediate challenges, it will not be able to deliver results overnight. The company is Pemex, the state oil producer, which is facing competition for the first time since its creation in 1938, under a landmark reform pushed through by Enrique Peña Nieto, Mexico’s president. Legislation that will open the sector to private investment was passed in August. Private oil companies, including foreign groups, are expected to start piling in next year.

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Pemex boss: looking to the US and to Asia

September 17, 2014

09/15/14 Financial Times

Oil barrelsEver pragmatic, the boss of Pemex, Mexico’s revamping state oil company, knows the first barrels of oil extracted from the enticing deepwater prospects in the Gulf of Mexico under the country’s historic energy reform will probably be processed and shipped through existing US infrastructure. But don’t be tempted to think that Pemex is taking its eye off Asia.

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