MEXICO ENERGY REFORM: WITH ECONOMIC PROMISES COMES UNPRECEDENTED RISK

June 25, 2015

6/23/15 Oil and Gas Financial Journal

energy- oil pumps 2Mexico’s energy reforms provide an historic opportunity to revitalize its energy sector and bolster its overall economy, but a whole new crop of assets will have to be protected and attendant risks sensibly managed, says Cooper Gay Swett & Crawford, a Miami-based independent global wholesale, underwriting management and reinsurance broker group.

Last year, Mexico’s Congress gave final approval to energy reforms intended to open up the country’s upstream oil and gas sector to badly needed private investments. Such industry participation by other nations had been outlawed in Mexico since the 1930s. However, despite abundant oil and gas reserves, Mexico’s energy sector is underdeveloped and sorely in need of technological assistance and investment capital to bring it into the 21st century. Mexico already imports large volumes of natural gas by pipeline from Texas, and is in danger of becoming a net importer of oil as well.

Read more…


Report: How to make business sense of Mexico’s energy reform

June 3, 2015

6/1/2015 Fuel Fix

energy- oil pumps 2Mexico is opening its oil and gas fields to foreign investment for the first time in decades – a potential business bonanza for companies that can navigate the changes.

A preliminary report released last week on Mexican energy reform was prepared by the University of Texas at San Antonio Institute for Economic Development, the Universidad Autonoma de Nuevo Leon, the Asociacion de Empresarios Mexicanos and the Woodrow Wilson Center.

The report is aimed at companies on both sides of the border trying to figure out how to get a toehold in the new energy market in Mexico.

Read more…

Download the report here.


Shale to Play Significant Role in Mexico’s Energy Reform Success

June 3, 2015

6/2/2015 Rigzone

telecomunicaiconesMexico’s shale resources will play an integral role in the success of Mexico’s energy reform, but significant challenges will need to be addressed, including the construction of roads, housing, rail, pipelines and other infrastructure, as well as skilled workforce development and security issues.

The country is well-positioned to take advantage of unconventional extraction techniques due to its close proximity to major shale development in South and West Texas, according to a preliminary report that examines the impact of energy reform on the Mexican states of Coahuila, Nuevo Leon, Tamalipas, and Veracruz. It also outlines the new institutional framework of Mexico’s energy sector.

The report is the result of a collaboration between the University of Texas at San Antonio (UTSA), Universidad Autonoma de Nuevo Leon, Asociacion de Empresarios Mexicanos, and the Mexico Institute of the Woodrow Wilson International Center for Scholars.

Read more…

Download the report here.


NEW REPORT: Economic Impact and Legal Analysis of the Shale Oil and Gas Activities in Mexico

June 3, 2015

preliminary-report-bannerOpportunities for unconventional or shale oil and gas production in Mexico are in the earliest stages of development. While shale gas production increased significantly in the U.S. over the past decade or so, and shale oil production over the past few years, no other country in the world has yet to replicate that success. Due to its close proximity to major shale field development in South and West Texas, Mexico is particularly well positioned to take advantage of unconventional extraction techniques. However significant challenges will have to be addressed.

This preliminary report focuses on the impacts the Energy Reform will have on the Mexican Economy. The core study area concentrates on the economic impact on the following states: Coahuila, Nuevo León, Tamaulipas and Veracruz. This report contains a general overview on the Energy Reform, an economic background on oil and natural gas (especially trade between the U.S. and Mexico), a state level profile, infrastructure, and educational issues specific to oil and natural gas activities.

The purpose of the study is to gauge the growth and the effects that the oil and natural gas industries have for residents and decision makers in the aforementioned Mexican States. Although industry developments and other social issues may be still considered, the scope and breadth of these impacts are very large, and tangible effects on the region will be felt for years to come.

Click here to download the report.


Doubts persist over Mexican contract terms: will the government get it right in time?

May 29, 2015

5/29/2015 BeyondBrics, Financial Times

By Duncan Wood, Mexico Institute Director

Duncan,-for-wwics-site-2On June 7, Mexican voters will go to the ballot box in mid-term elections that will be viewed as a test of the Enrique Pena Nieto presidency and of the ruling PRI party. Despite the many challenges facing the government, it is likely that the president and his party will pass that test by winning a majority in the national Chamber of Deputies, as well as a number of gubernatorial races across the country.

However, a few weeks after the electorate takes to the polls, the government faces another, more demanding examination of its most important achievement thus far: the opening of the nation´s hydrocarbons industry to private and foreign investment, when companies submit bids on the first batch of contracts under Round One. The outcome of that test is far from certain, and there endure substantial concerns in the oil industry over the contract terms that have been issued by the government to date. In fact, there is a growing sense that, unless the government makes major changes to the contract terms, few foreign companies will choose to participate on this occasion.

Read more…


New Publication: Renewable Energy in Mexico’s Northern Border Region

April 28, 2015

Renewable EnergyHeavy reliance on fossil fuels is a common theme across the Mexican Northern Border States with the notable exception of Baja California (which gets over 30% of its public service electricity from the Cerro Prieto geothermal plant). Despite abundant wind, solar and bioenergy resources, Northern Mexico has yet to fully embrace the energytransition, but this could rapidly change in the next few years.

Mexico’s recent Energy Reform, which included modifications to the Constitution in December 2013 and a comprehensive package of implementing legislation on August of 2014, represents a fundamental transformation of the sector. For renewable energy, the major opportunities are related to the creation of a new electricity market and the introduction of Clean Energy Certificates. In the new market, the National Center for Electricity Control
and Dispatch (CENACE) will be fully independent of Mexico’s Federal Electricity Commission (CFE), thus allowing for a more transparent wholesale electricity market in which users above a set consumption threshold will be allowed to freely switch between generators. Mexico has already committed to produce 35% of its electricity from clean sources by 2024.

This publication “Renewable Energy in Mexico’s Northern Border Region” analyzes the current renewable energy situation in the north of the country, discusses potential resources that could be used for electricity generation from renewable sources, and provides policy recommendations to increase the use of renewables in the energy sector and to achieve long-term energy sustainability.

Download the publication here. 


Upcoming Event: The Future of Renewable Energy and Climate Change Policy in Mexico

April 22, 2015

environment - energy - light bulb with paddy riceWHEN: Tuesday, April 28th, 9:00am-10:30am

WHERE: 5th Floor Conference Room, Woodrow Wilson Center

Click here to RSVP.

Mexico’s recent Energy Reform marked a big change in terms of investment and opportunities in oil and gas. However, the comprehensive package of legislation was also aimed to incentivize and accelerate the change towards the production of goods and services based on renewable energies. Mexico has great potential to develop a wide range of renewable energies including solar energy, hydroelectric, geothermal, bioenergy, and wind energy.

What’s more, in March of this year, Mexico became the first developing nation to formally promise to cut its carbon emissions, a potential milestone in efforts to reach a worldwide agreement on tackling climate change. Together with the United States’ commitment to cut emissions by 26-28%, Mexico’s commitment to a 25% reduction by 2030 builds on legislation passed by the nation’s congress to reduce emissions and generate more electricity from renewable sources.

With these developments in mind, the Wilson Center’s Mexico Institute is delighted to host Mexico’s Under Secretary of Energy Planning and Transition, Leonardo Beltrán, who will speak on both Mexico’s energy reform process and the prospects for renewable energy and carbon gas emissions reductions. At the same time, we are proud to launch our new publication “Renewable Energy in Mexico’s Northern Border Region,” which analyzes the current renewable energy situation in the north of the country and potential opportunities to engage in a productive relationship with the private and the public sectors in the United States. Jonathan Pinzón, one of the report’s authors and the Chief Operating Officer of GreenMomentum, will present the report’s findings and discuss the current state of renewables in Mexico. Our event will also feature comments from Hector Castro Vizcarra, the Embassy’s Minister for Energy Affairs.

Speakers

Leonardo Beltrán Rodríguez
Under Secretary of Energy Planning and Transition, Mexico’s Ministry of Energy

Hector Castro Vizcarra
Representative of the Secretariat of Energy (SENER) to the Embassy of Mexico in the United States

Jonathan Pinzón
Chief Operating Officer, GreenMomentum

Moderator

Duncan Wood
Director, Mexico Institute, Wilson Center

Click here for more information.

A live webcast will be available here


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