Mexico Gets Its First Private Oil Well in 80 Years

5/23/2017 Bloomberg

oil wellFor the first time in almost 80 years, a private company has sunk a new offshore oil well in Mexican waters — the latest step in the country’s drive to allow foreign competitors back into its energy markets.

A joint venture of London-based Premier Oil Plc, Houston’s Talos Energy LLC and Mexico’s Sierra Oil & Gas began drilling the well May 21, Premier said in a statement Monday. It’s the first offshore exploration well to be launched by anyone other than state-run monopoly Petroleos Mexicanos since the country nationalized its oil industry in 1938.

The Zama-1 well, in the Sureste Basin off the state of Tabasco, holds an estimated 100 million to 500 million barrels of crude, Premier said in the statement. Drilling is expected to take up to 90 days to complete, at a cost to Premier of $16 million. The three companies won rights to the prospect in 2015, in the first round of bidding after Mexico voted to open its ailing oil industry to private investment.

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Fed’s Kaplan says U.S. benefits from trade ties with Mexico, Canada

5/24/2017 Reuters

map north americaDallas Federal Reserve Bank President Robert Kaplan said on Wednesday that he feels “very strongly” that U.S. trade relationships with Canada and Mexico help U.S. competitiveness, in remarks that come as President Donald Trump looks at renegotiating the North American Free Trade Agreement.

“I don’t want to see us to jeopardize those relationships: it would cost U.S. jobs,” Kaplan said in Toronto during a dinner sponsored by the C.D. Howe Institute.

“I am hopeful these agreements will be addressed in a constructive way.”

Kaplan, otherwise, avoided directly commenting on policies favored by Trump, who has criticized U.S. trade agreements with Canada and Mexico, among others, saying they hurt U.S. workers.

Turning to interest rates, Kaplan said he sees two more rate hikes as a base case. The Fed has signaled that it may raise rates two more times this year, although most analysts expect only one more rate hike.

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Citi struggles to bring back shine to its Mexican crown jewel

5/24/2017 Reuters

REUTERS/Henry Romero

The newly refurbished Citibanamex branch in Mexico City’s affluent Del Valle neighborhood opens into a Scandinavian-chic space where salespeople chat with clients at touch screens. The next room, though, is filled with customers queueing up in front of tellers or waiting on benches. Outside, more line up to use the ATMs.

The facelift reflects Citigroup Chief Executive Michael Corbat’s ambition to turn the group’s Mexican operation into a “state-of-the-art bank.”

The lines symbolize the challenge: overcoming the legacy of years of underinvestment and a series of scandals that left the 133-year-old institution lagging rivals in technology, profitability, market share and customer satisfaction.

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Mexico says 1st-qtr foreign direct investment rises to $7.9 bln

5/23/2017 Reuters

corruptionMexican foreign direct investment (FDI) rose to $7.9 billion in the first quarter of the year, 0.6 percent above the preliminary figure for the same period a year ago, Mexico’s Economy Ministry said on Tuesday.

The figure was also nearly 40 percent above the FDI recorded in the fourth quarter, when Donald Trump won election as U.S. president and began threatening to impose steep taxes on American companies that move jobs to Mexico.

Still, central bank data show the final data for the first quarter ended considerably higher during the last four years, and the 2016 final figure totaled $10.4 billion – almost a third higher than the preliminary figure.

Growth data this week showed the Mexican economy has so far shrugged off fears that Trump’s policies would wreak havoc on exports and investment, prompting the government to raise its full-year growth forecast.

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Mexico’s oil regulator approves new Gulf area for Pemex

5/23/2017 Reuters

PemexMexico’s oil regulator on Tuesday approved a promising new deep water block to state oil company Pemex [PEMX.UL], but conditioned the allotment on the firm developing the area with a partner that would eventually operate it.

The new Chachiquin area, adjacent to Pemex’s Nobilis-Maximino block, could produce 80,000 barrels per day of oil once it reaches peak output, according to the regulator’s estimates.

Development of the area is not expected to begin until 2024 at the earliest.

“It’s incredibly important for the country to move forward with deep water projects,” said Hector Moriera, a commissioner with the regulator, known as the CNH, adding that 53 percent of Mexico’s prospective oil resources are in deep water deposits.

“That’s where much our country’s oil future lies,” he said.

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IMF says reaffirms Mexico’s $86 billion flexible credit line

5/23/2017 Reuters

imfThe International Monetary Fund on Tuesday said it reaffirmed Mexico’s access to a flexible credit line worth about $86 billion dollars that the country could use to stabilize its currency in cases of extreme volatility.

The IMF said Mexico expressed that it treated the 2-year- line approved last year as “precautionary.” The IMF first extended a flexible credit line to Mexico in 2009 and it boosted the amount last year as the peso was battered to a record low.

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Mexico growth outlook brightens on exports, tone on NAFTA: official

5/22/2017 Reuters

Export Or Import DirectionsThe outlook for Mexico’s economy is improving after stronger factory exports in the first quarter and a more optimistic tone on trade talks with the United States, a top finance ministry official said on Monday.

Finance Ministry Chief Economist Luis Madrazo said Mexico’s exports, excluding oil which has been hit by lower production by state-run oil company Pemex, grew 9.2 percent in the first quarter from a year earlier, the strongest pace in more than two years.

“(Factory) exports are now firing on all cylinders, and that is very good for Mexico,” Madrazo told Reuters in a telephone interview.

Mexico exports mostly manufacturing goods, compared to other Latin American economies that produce more raw materials, and it sends nearly 80 percent of its exports to the United States.

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