Mexico’s Deep-Water Oil Round: The Time Of Truth For Energy Reform?

1/12/16 Forbes

oil wellMEXICO CITY — For Mexico, 2016 is drawing to a close as a difficult year. The security situation has shown no signs of improvement, with fighting among organized criminal groups and the spike in the homicide rate that occurred in 2015 (after a hopeful decline from 2011 to 2014) continuing into the first nine months of the year. In turn, low oil prices and increasing public debt levels prompted budget cuts that have impacted government spending, notably in state-owned oil company Pemex.

In this context, a sign of hope at the end of 2016 concerns developments around energy reform, the vast legal change passed in 2013 that opened up hydrocarbon exploration and production to private sector investment.  Specifically, on December 5th all eyes will be fixed on the results of the fourth round of the first bidding process (Round 1.4) to undertake exploration and production in 10 deep water oil fields in the Gulf of Mexico.

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Can Oil Help Mexico Withstand Trump’s Attack on Trade? It’s Hard to See How

The New York Times 11/27/16

energy - oil pumpsCIUDAD DEL CARMEN, Mexico — The town that oil built is emptying out. “For Sale” signs are plastered on concrete-block houses and sun-bleached bungalows alike. The idled oil workers who used to cluster in the main square, hoping to pick up odd jobs, have moved on. Here in Ciudad del Carmen, on the gulf coast of Mexico, even the ironclad union positions are slipping away. Some roughnecks on the offshore rigs of the national oil company, Pemex, have not worked in months, and their voices are filled with anxiety. “What do you think is going to happen?” some ask.

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Trump win churns U.S.-Mexico water talks

Politico 11/26/16

colorado riverNegotiations between the U.S. and Mexico to seal a water-sharing deal over the dwindling supplies on the Colorado River are confronting a new deadline: the inauguration of Donald Trump.

A 16-year drought has sent water levels at the river’s most important reservoir, Lake Mead, to their lowest point since it was first filled in the 1930s, threatening supply cuts for 40 million people across seven U.S. states and two Mexican states. It’s also raising the stakes for the two countries as they try to hammer out an extension of a four-year-old agreement on how to share the water.

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Trump Trade Stance With Mexico Could Press Gas Prices

11/14/16 The Wall Street Journal 

energy - gas pumpDonald Trump’s presidency is widely viewed as a boon for the U.S. energy industry, but some of his planned policies could pose problems for the natural-gas business.

Mr. Trump has won plaudits from energy executives for saying he would peel back government regulations on oil companies, oppose global efforts to curb climate change and review a recent agreement that lifted sanctions on Iran, a major oil exporter.

Yet some of his other proposals could be detrimental to natural gas. He has pledged to tear up trade pacts and wall off Mexico, which could hurt the flow of U.S. natural gas to its southern neighbor. Mexico has become an increasingly important outlet for the fuel that has helped buoy domestic prices amid a glut of shale gas, analysts say.

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Mexico’s IEnova increases credit line with banks to $1.17 bln

11/3/16 Reuters

Mexican energy infrastructure firm IEnova, a unit of U.S.-based Sempra Energy , said on Thursday it had increased a credit line with a group of banks to $1.17 billion from $600 million.

The credit line will be used as working capital, investments as well as other general corporate projects, IEnova said in a statement to the Mexican stock exchange.

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Mexico siphoning off excess U.S. gasoline supply

10/27/16 CNBC

14319902599_cf7fa8ca0d_o.jpgThe U.S. has quietly been increasing exports of gasoline to record levels, and that is one factor that could be helping reduce the nation’s oil glut on the margin.

Last week, the U.S. exported about 5.7 million barrels of gasoline, possibly a record. The 811,000 barrels a day reported is nearly twice the amount exported at the same time last year and almost a third more than was exported a week earlier, according to the U.S. Energy Information Administration.

Mexico loses millions of dollars daily to fuel theft

10/17/16 PRI

gas pipeline and gaugeMexico is opening up to private gasoline retailers, and a new wave of fuel imported from the United States is expected to follow.

But here’s a not-so-little problem: Gangs steal a huge amount of gas, and loose law enforcement and corruption let it happen.

For the past decade or so, there’ve been widespread reports of drug cartels putting illegal taps in the fuel pipeline network. The state-run oil company Pemex has documented that some of its workers and contractors have participated, after receiving bribes or even death threats.

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