Mexico’s $1 billion oil hedge may pay economic dividends

09/10/16 CNBC

oil wellAs the world in general and oil producers in particular continue to navigate a world awash in cheap crude, Mexico is trying to get ahead of the game — and potentially reap a big reward in the process.

Home to oil reserves of at least 10 billion barrels according to U.S. Energy Information Administration figures, Mexico has traditionally done very well by hedging oil in global markets.

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Mexico’s IEnova says recasts Pemex deal to buy pipeline stake

07/12/2016 Reuters

5337912858_1b19aea036_mIEnova, the Mexican unit of U.S.-based Sempra Energy, said on Tuesday it had restructured a deal to buy state-run oil company Pemex’s 50 percent stake in pipeline company Gasoductos de Chihuahua for $1.108 billion.

In December, Mexico’s Federal Economic Competition Commission (COFECE) said it objected to a previous incarnation of the deal, as Pemex had failed to sell its stakes in a liquefied petroleum gas pipeline and a natural gas pipeline, as ordered by a previous anti-trust agency.

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Mexico electricity market reforms attempt to reduce costs and develop new capacity

07/07/16 Business Day

energy - oil_rigMexico is in the process of reforming much of its electricity industry. Earlier in 2016, Mexico opened up day-ahead and real-time trading in a new wholesale power market. Although wholesale prices briefly spiked for a handful of hours, average prices in most locations during the market’s first six months of operation have ranged from 880 to 1,100 pesos per megawatt hour (MWh), or about $48/MWh to $60/MWh.

Electricity prices in Mexico near the United States border have generally been lower than prices in Mexico’s relatively isolated peninsulas. Prices in the Tijuana and Ensenada zones averaged $23/MWh during the first six months of 2016, similar to prices across the border in Southern California.

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Mexico, Cuba, U.S. discuss ‘Doughnut Hole’ in Gulf waters

Reuters 07/06/16 

GulfofMexicoDelegates of Mexico, the United States and Cuba met on Wednesday to discuss the limits of the Western Polygon, an area in the waters of the Gulf of Mexico that has oil and gas deposits but no clear boundaries, two sources close to the discussion said.

Talks about who owns what in the “Doughnut Hole” were spurred after Cuba and the United States announced they would restore diplomatic ties in late 2014.

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Mexico’s Ever Growing Natural Gas Market

07/02/16 Forbes 

natural gas drillMexico is a very fast growing natural gas market, and imports from the U.S. could reach 8-10% of current U.S. production much faster than most realize. The 2013 Energy Reforms are a historic opportunity for state-owned Pemex to increase oil and gas production and lift the economy. Pemex has been forced to unfairly provided the government with 35-40% of its budget. Too lengthy of a subject to detail here (check here, here, here), but the reforms and the Implementation Plan should install a fully competitive Mexican natural gas market around 2018.

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Mexico, ASU moving forward with energy reform

06/23/2016 Arizona State University

4607817256_ee0666b06a_mThe visit here from Mexico’s lead energy-reform planner June 23 underscores the key role Arizona State University will have in working with the United States’ southern neighbor to take its energy sector into the future.

Leonardo Beltrán Rodríguez, undersecretary for planning and energy transition under Mexico’s Secretary of Energy (SENER), met with ASU leaders and academics in Tempe before heading to Scottsdale to address the Arizona-Mexico Commission Summit 2016.

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Statoil May Consider Pemex Partnerships in Deep Waters, VP Says

06/13/16 Bloomberg

deepwatersStatoil ASA may seek to partner with Petroleos Mexicanos in Mexico’s deepwater fields as the producer looks to gain a foothold in the country’s recently opened energy market.

“We see opportunities to bid on deepwater farm-out agreements with Pemex if the terms and conditions are right,” said Tore Loseth, vice president of Statoil Exploration in the U.S. and Mexico, on the sidelines of an oil conference in Monterrey on June 10. “But we need to know more about how the process will run before we can properly evaluate these.”

Pemex and Mexico’s energy ministry announced plans last week to farm out the Trion field in the Gulf of Mexico -– an area believed to contain about 485 million barrels of reserves and estimated to cost $11 billion to develop. While the agreement will be in the form of a license, the details of the contract have yet to be spelled out.

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