Extortion of Mexico Electric Company Spotlights State Weaknesses

3/23/2017 InSightCrime

Energy -electricity_transmission_linesOrganized crime groups are extorting Mexico’s federal electricity company, highlighting the ways in which criminal organizations are exploiting the state’s weakness to increase their revenues.

Mexico’s Federal Electricity Commission (Comisión Federal de Electricidad – CFE) has suffered extortions by organized crime groups in the north and west of the country, reported Zeta Tijuana.

According to Gustavo Cuevas, a CFE executive, criminals are allegedly telling local businesses not to pay the energy company, and to pay organized crime groups instead.

“They approach a company, a textile factory, and say: from now on you no longer pay for your electricity. You are going to pay me for it,” Cuevas told Reforma.

At the same time, criminal groups are allegedly threatening CFE employees not to cut power to businesses that are paying criminals rather than the energy company.

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Mexico to redo open season energy auction hit by ‘problems’

3/16/2017 Reuters

energy - oil barrelsMexico has postponed an auction of part of state oil company Pemex’s excess capacity for transport and fuel storage due to “methodological problems”, the Energy Regulatory Commission (CRE) and Pemex said in a joint statement late on Wednesday.

The auction is aimed at allowing new participants to enter the recently opened fuel market, as Mexico moves away from an energy industry dominated by former state-owned monopolies and draws up new rules for the more open energy markets.

The auction for excess capacity in the northeastern states of Sonora and Baja California will be redone before the end of March and companies that had prequalified for the initial auction will be allowed to participate, the statement said.

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Corruption, Oil Theft an Explosive Cocktail for Mexico State

3/14/2017 InSight Crime

corruptionMexican authorities arrested local officials who they accused of aiding a criminal group’s assassination of state investigators in the “Red Triangle,” an area of the Puebla state that has become a battleground for control of the lucrative oil theft business.

Authorities discovered the bodies of three investigators from the anti-kidnapping unit of the Puebla state prosecutor’s office on March 9, reported Animal Político. The officials working on a kidnapping case were attacked in the Atzitzintla municipality, Puebla, and their corpses were dumped in the neighboring state of Veracruz.

The incident sparked a massive operation, as the government dispatched 500 security personnel, which led to a string of arrests, including that of Atzitzintla’s mayor and five municipal police officers. Authorities believe that the officials arrested the three state investigators before delivering them to a Zetas-linked criminal group called “Los Bucanans,” which executed the victims, according to Central de Puebla.

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Small Mexican company wants to light Trump’s border wall

3/14/2017 Reuters

lightAmong the hundreds of companies expressing interest in helping to build U.S. President Donald Trump’s southern border wall, one four-member concern stands out: It is from Mexico.

Ecovelocity, based in the central city of Puebla, is betting it can provide cheap industrial LED lights for the project, which has sparked the ire of Mexicans.

Theodore Atalla, Ecovelocity’s owner, is an Egyptian native of Greek heritage who has made Mexico his home for most of the past two decades. He said his firm looked to undercut competition by providing lighting it imports mostly from China.

“It would only be on the Mexican side because I don’t think we would be allowed to work on the other side,” Atalla said in an interview. “They said they only wanted American products.”

Trump has vowed to start work quickly on the barrier along the nearly 2,000-mile U.S.-Mexico border to prevent illegal immigrants and drugs from crossing to the north. He has repeatedly said Mexico will pay for it, something the Mexican government has flatly said it will not do.

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Mexico Takes Another Step Toward Tapping Needed Resources

3/13/2017 Journal of Petroleum Technology

energy - oil pumpsBHP Billiton’s signing of a contract with Pemex on 3 March marks the beginning of its work on the Triton discovery offshore Mexico and the potential to boost Mexico’s oil production to meet its growing demand. The company bid on the field last December in Mexico’s auction of 10 deepwater blocks in the fourth stage of the Round One bids since the country’s Energy Reform in 2013, which opened its offshore and unconventional fields to international companies. Once the field is fully appraised, BHP Billion expects it to be in the top 10 fields discovered in the Gulf of Mexico in the past decade. Pemex estimated the gross recoverable resource to be 485 million BOE.

The development of the Triton project is estimated to require an investment of USD 11 billion, with production beginning in 6–7 years. More than 100,000 barrels of crude oil equivalent per day are estimated.

Last year’s bid rounds opened the door to the expertise needed for expanded exploration and production in Mexico’s deep water. Although the country has significant hydrocarbon resources, it suffered from the pre-reform model that made Pemex the sole player in oil and gas upstream development, and the government’s spending of hydrocarbon revenue for other priorities, according to the International Energy Agency (IEA).

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IEA praises Mexico for ‘world’s most ambitious energy transformation’

3/9/2017 Power Engineering International

Energy -electricity_transmission_linesMexico’s energy reforms are “the most ambitious energy system transformation worldwide in a long time” according to Paul Simons of the International Energy Agency.

Simons, Deputy Executive Director of the IEA, was speaking as the energy organisation released a report into the Mexican power sector.

In it the IEA highlights how Mexico’s 2013 energy reforms “ended the country’s decades-long monopolies in the oil and power sectors and attracted new actors to the country’s energy sector”.

Today, active competition policy remains the crucial ingredient to ensure that the country will reap the long-term benefits of those reforms, according to the report.

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Mexico eyes U.S. market for Trion project’s crude, natural gas

3/9/2017 Reuters

pemexA pipeline network with spare capacity could allow Mexico to export oil and gas from its flagship offshore Trion project to the United States, the head of Mexico’s oil regulator said on Thursday.

The deep water Trion development, with prospective reserves of almost 500 million barrels of oil, was farmed out in December by state-run Pemex [PEMEXF.UL] to Australia’s BHP Billiton, which became the operator of the $11 billion project.

The ailing Mexican oil firm, which kept a 40-percent stake, jointly shares for the first time the risks and rewards of a potentially lucrative project with a private producer.

Although a development plan has yet to be submitted, the consortium could use a cheaper and quicker option of getting production to the United States by using pipelines that serve the neighboring Great White field on the U.S. side of the Gulf of Mexico, Juan Carlos Zepeda, head of the national hydrocarbons commission (CNH), said on the sidelines of CERAWeek energy conference in Houston.

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