Mapping as Mexico Opens for Exploration

10/7/2015 The New York Times

MEXICO CITY —Sediment_in_the_Gulf_of_Mexico_(2) Now that Mexico’s potential oil and gas riches are open to outside investment, how does the industry figure out what’s there?

North of an east-west line across the Gulf of Mexico are United States waters, where the bedrock deep below the ocean floor has proved to hold vast reservoirs of oil and gas. But south of that line, there is very little information.

Geologists suspect that Mexico’s Gulf waters hold similar resources, but they lack the crucial first step in oil exploration, the seismic data that allows them to develop a picture of what lies beneath.

Until now, whatever seismic data existed was closely held by Pemex, the state-owned oil company, which commissioned the studies for itself. But that is all starting to change.

Not only did Mexico’s 2013 energy reform end Pemex’s monopoly on exploration and production, it also ended its monopoly on information.

Read more…

Transparency is key for Mexico’s deepwater block auction: GlobalData

10/7/2015 World Oil

532687354_fdef042d72_zLONDON — As Mexico’s first offshore bidding round for already discovered fields saw bids significantly higher than the minimum set up by the government, adding further transparency to the process would be positive for the round as it approaches its deepwater phase, according to an analyst with research and consulting firm GlobalData.

Adrian Lara, GlobalData’s senior upstream analyst for the Americas, says that the Mexican government’s announcement of the minimum profit oil worked out well, especially in discovered fields, as opposed to the disappointment surrounding the exploration blocks on offer during the previous phase of Round 1.

Read more…

Aeromexico Signs Agreement with Mexico Carbon Platform, MEXICO2, to Invest in Carbon Projects

10/2/2015  Market Watch – PRNewswire

aeromexicoMEXICO CITY, Oct. 2, 2015 /PRNewswire/ — Today Aeromexico signed an agreement with the independent platform for trading carbon credits called MEXICO2, to purchase Certified Emission Reductions (CERs), also known as carbon credits, for national projects certified under international standards.

MEXICO2 facilitates the purchase and sale of CERs and supports offsetting emissions, thereby guaranteeing the transparency of transactions in the voluntary carbon market.

The global aviation industry is responsible for two percent of all CO2 emissions from the use of fossil fuels, and this figure could grow to three percent by 2050. Signing this agreement with MEXICO2, means that Aeromexico has adopted the International Aviation Transport Association (IATA) guidelines to offset carbon emissions, based on the commitment set in 2005 for carbon-neutral growth by 2020 with 50% reduction by 2050 relative to 2005 levels,” said MEXICO2 director Eduardo Piquero.

Read more…

U.S. Is Net Oil Exporter to Mexico for First Time in Two Decades

10/1/2015 Bloomberg 

energy - oil barrelsThe U.S. became a net oil exporter to Mexico for the first time in more than 20 years as output from shale fields pushed the world’s biggest consumer toward energy independence.

Net exports — comprising only oil products since the U.S. bans most shipments of crude — totaled 48,000 barrels a day in July, the U.S. Energy Information Administration said in data released Wednesday. A decade ago, the country bought a net 1.3 million barrels of oil from its southern neighbor.

Read more…

Mexico Awards Three Areas in Oil Auction

Wall Street Journal 9/30/2015

energy -drilling_platform_in_seaMEXICO CITY—The Mexican government on Wednesday awarded three of the five areas of oil and gas reserves put out to bid in its second oil auction since opening the industry to private and foreign investment.

The companies that submitted winning bids for the fields containing light oil and gas in the southern Gulf of Mexico were Italy’s ENI International, Pan American Energy of Argentina in consortium with E&P Hidrocarburos y Servicios, and Fieldwood Energy of the U.S. in consortium with Mexico’s Petrobal.

In a first auction of exploratory blocks in July, just two of the 14 blocks were awarded. The poor results of that auction led the government to improve the terms for the second auction and to announce ahead of time the minimum bids that the government would accept for each area.

Read more…

Mexican President urges UN to reform Security Council, step up action against world drug problem

World Politics Review 9/24/2015

energy - oil_rigEarlier this month, the Mexican government submitted a budget to cut spending in 2016, including reduced investment in the state oil company Pemex, given the drop in global oil prices. In an email interview, Amb. Antonio Garza, former U.S. ambassador to Mexico and currently counsel in the Mexico City office of White & Case LLP, discussed Mexico’s economy and the impact of the oil shock.

WPR: How have declining oil revenues affected Mexico’s budget and spending power?

Antonio Garza: Historically, Mexico has relied on oil revenues to fund roughly one-third of its budget. This arrangement was fairly stable when oil prices were high, but as prices began plummeting last summer, so did the amount of money coming into government coffers, amounting to a roughly 36 percent year-on-year decrease for the first six months of 2015. The drop was steep, but things weren’t as bad as they could have been. Certain policies and outcomes—such as the government’s widespread hedging program, an uptick in non-oil taxes from the 2013 fiscal reform and a revenue surplus from the gasoline price cap—certainly helped lessen the budgetary pressure.

Read more… 

Deepwater lure could attract bidders to Mexico’s next licencing round

Energy Voice 9/29/2015

shutterstock_182486318Mexico needs to attract significant interest to salvage a bidding round hampered by delays and low oil prices according to research carried out by consulting firm GlobalData.

With Phase 4 of the current Round 1 licensing process offering the country’s first deepwater assets, GlobalData’s latest report reveals 13 exploration blocks will be open for bidding, together with several deepwater discoveries, with the general expectation that the assets will be offered under license.

Senior upstream analyst Adrian Lara, said evolutionary evidence from shallow-water terms suggests that the Mexican government is likely to change the adjustment mechanism to reduce the maximum additional royalty rather than accepting lower bids.

Read more…