Pressure to secure Mexico energy supply endangers green dream

08/01/2018 Reuters

amloMexico’s president-elect, Andres Manuel Lopez Obrador, will have a better chance of slashing poverty and inequality if he weaves a strong green thread through his policies, analysts say.

But despite high hopes the environment will be a top priority for his government, some fear plans to boost energy security by revitalizing Mexico’s petroleum industry sit uncomfortably with pledges on climate change and biodiversity.

“If they achieve everything they say, in six years Mexico will be in a very strong position regarding environmental protection,” Gustavo Ampugnani, Mexico director for conservation group Greenpeace, told the Thomson Reuters Foundation.

“It’s the chance to see environment and climate themes intersecting with other policies, not divided off as happened in the previous governments.”

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Mexico President-Elect: $16 Billion to Boost Oil Output

07/27/2018 The New York Times

amloMexico’s president-elect announced a $16 billion investment plan Friday to boost flagging oil production, refinery capacity and electrical generation.

Andres Manuel Lopez Obrador said the country must act “urgently” to reverse a decline that saw crude output drop to 1.88 million barrels per day in the first half of 2018, down from 3.4 million barrels per day in 2005.

Lopez Obrador pledged to increase production by 600,000 barrels per day in two years. He said about $9.5 billion in investment would be made in 2019, with more in ensuing years to upgrade existing refineries, build a new one, and support oil exploration. He said he will also upgrade hydroelectric and power generation plants.

State-owned oil company Pemex on Friday reported on a 163 billion peso ($8.7 billion) net loss for the second-quarter. It attributed the loss to the depreciation of the peso against the dollar.

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Lopez Obrador seeks to boost Mexico oil output to 2.5 million bpd from 1.9 million

07/27/2018 Reuters

AMLO 5.PNGMexican president-elect Andres Manuel Lopez Obrador said on Friday his administration will look to boost the country’s crude oil production to 2.5 million barrels per day (bpd) from 1.9 million bpd now.

Lopez Obrador, elected in a landslide July 1 victory and who will take office on Dec. 1, has said he is committed to expanding Mexico’s oil and gas output, which has declined steadily over the past 14 years due to a lack of investment and natural depletion of oil fields.

The leftist leader said he will look to revamp the nation’s six refineries so they are operating at full capacity within two years, and plans to build a new refinery in Dos Bocas in Mexico’s southern Tabasco state with an investment of 160 billion pesos ($8.6 billion) over three years.

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Mexico’s Pemex posts $8.2 billion net loss in second quarter

07/27/2018 Reuters

pemexMexican state-owned oil company Pemex on Friday reported a 163.16 billion peso ($8.2 billion) net loss for the second quarter due to foreign exchange losses and higher costs, according to a filing with the Mexican stock exchange.

That compares with a profit of 32.76 billion pesos in the year-ago period.

Sales rose 36 percent from a year earlier to 436.18 billion pesos on the back of higher crude prices and increased sales in Mexico.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, increased 42 percent to 149.76 billion pesos.

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AMLO’s Self-Sufficiency Agenda for Mexico Energy Sector Creates Risks for Pemex, Moody’s Says

NGI Mexico GPI  07/26/2018 

The next Mexican administration’s focus on energy self-sufficiency could pose risks for national oil company Petroleos Mexicanos (Pemex), according to a recent report by Moody’s Investors Service.

Andres Manuel Lopez Obrador, popularly known by his initials AMLO, won the presidency on July 1 with more than 50% of the vote. He also appears headed to a supermajority in the Congress, which would give him a strong mandate for his six-year term that begins Dec. 1.

On the campaign trail, AMLO was a frequent critic of the 2013-2014 energy reforms, which have opened up the country’s oil and gas sector to private and foreign investment. He has also indicated he wants to return Pemex to the glory days of the past decade, when oil production was still in excess of 3 million b/d.

AMLO’s emphasis on self-sufficiency in the energy sector “raises questions about whether Pemex can continue to take advantage of favorable oil prices and solid investment appetite from foreign companies,” according to Moody’s credit ratings analysts.

“The energy agenda of the incoming Lopez Obrador administration poses three particular risks for Mexico’s national oil company: controlling fuel prices, requiring capital spending on building or upgrading refineries, and delaying oil and gas auctions.”

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Mexico business group unhappy about delay in oil auctions

07/19/2018 Reuters

Oil Rig 2 by Flickr user tsuda

A decision to delay Mexican oil auctions until after the next president takes office does not augur well for opening the country’s energy sector to private investment, the head of a major business association said on Thursday.

The government said on Wednesday it had postponed auctions scheduled for September and October until next February to give firms more time to consider the blocks on offer.

Last month, it said the auctions would be going ahead as planned.

Incoming President Andres Manuel Lopez Obrador, a leftist, has been a long-standing critic of opening up the oil and gas sector to private capital, and said before the election he would demand the auctions be halted.

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Mexican oil tenders shelved until after leftist leader takes office

07/18/18 Reuters

oilMexican oil auctions originally set for later this year will be postponed until February 14, the country’s oil regulator on Wednesday, allowing time for leftist President-elect Andres Manuel Lopez Obrador to take office.

While on campaign, Lopez Obrador said he would request a pause in auctions to allow his team to check for corruption in contracts already issued. The national hydrocarbons commission said the decision was taken to allow companies more time to study the areas on offer.

A total of 45 onshore areas, including both conventional and shale blocks, were originally scheduled to be auctioned on September 27, while tenders to pick partners for state-owned oil company Pemex in seven separate areas had been set to be awarded on October 31.

The projects would have been the last scheduled oil tenders of outgoing President Enrique Pena Nieto, who leaves office at the end of November. Lopez Obrador takes office on Dec. 1.

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