Upcoming Event! Second Annual North American Energy Forum

Energy Banner Color UPDATEDWHEN: Thursday, September 17, 9am-4pm

WHERE: Woodrow Wilson International Center for Scholars

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The Mexico and Canada Institutes of the Woodrow Wilson Center are pleased to invite you to the Second Annual North American Energy Forum
Featured Keynote Speakers: 
Mexican Under- Secretary of Energy for Hydrocarbons, Lourdes Melgar
Mexican Under-Secretary of Energy for Electricity, César Hernández Ochoa
The Forum will also feature panels on:
  • The Outlook for Oil and Gas under Low Prices
  • North American Electricity Futures
  • Low Carbon Futures
Over the past year, two new developments have left their mark on North America’s energy markets. The first concerns the impact of low oil prices on the region’s producers, with revenue affecting existing and future projects. Alongside the issue of price, we have seen major developments in all three North American countries. In Mexico, the first round of oil contracts is underway, with contracts awarded for exploration in shallow water in July of 2015. At the same time, we have seen major new investment plans unveiled in the electricity sector. In Canada, major infrastructure challenges and political change in the province of Alberta have altered the investment environment. In the US, the Interior Department proposal to open a stretch of the Atlantic Ocean to offshore drilling has generated a highly charged debate, and new EPA rules on emissions have been the subject of analysis and legal challenge. The objective of the forum is to provide insight and draw attention to the challenges and opportunities that these new developments have created.

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Falling energy prices in Mexico could be bad for Ontario

8/13/2015 CBC News

energy - gas pumpOngoing efforts to drive down the costs of energy in Mexico may hurt the competitiveness of the industrial sector in southwestern Ontario, warns an energy policy expert.

Over the past two years, Mexico has brought forward legislative changes to allow greater private and foreign investment in its oil, gas and electricity sectors, said Duncan Wood, the director of the Mexico Institute in Washington, D.C.

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Will There Be Blood?

07/30/15 US News

energy - oil_rigOn one particular pipeline being built in Mexico’s desert, work stopped at 5 p.m. No exceptions.

“After 5:30, when the cartels start moving drugs, they have to leave the site. And the cartel made it very clear that if they saw them after 5:30, they would be butchered. So they enter into an ‘agreement,'” says Miriam Grunstein, a professor at the Universidad Autonoma de Nuevo Leon and attorney who advised the unnamed pipeline construction company that entered into the understanding.

“It’s very spooky, but that’s how it works,” she says.

Pick your euphemism, but oil and gas companies are certainly no strangers to working in “volatile,” “dynamic” or “uncertain” settings, whether they be in Angola, Colombia, Indonesia, Nigeria or Papua New Guinea, not to mention Iraq after the U.S. invasion. Now Mexico may soon join that list: Last year, his country faced with a potential credit downgrade and hungry for cash, President Enrique Pena Nieto announced Mexico would begin allowing foreign companies to drill for oil and gas alongside the state-owned company, Petroleos Mexicanos, or Pemex, which has controlled exploration and production since 1938.

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Congressional testimony: Mexican energy reform

7/24/15 Energy Global

via Flickr - Dave Parker
via Flickr – Dave Parker

Below are highlights from the testimony given by Ambassador Carlos Pascual, Senior Vice President, IHS Inc. before the House Foreign Affairs Committee, Subcommittee on the Western Hemisphere regarding recent reforms to the energy sector in Mexico in the context of greater North American energy independence.

“Since 2012, Mexico has embarked on an historic opening of its energy sector to allow private investment and competition in the production, transit and sale of oil, gas and electricity, and in the coming years in retail markets as well. On July 15, Mexico completed the first tender since 1938 for the sale of hydrocarbon assets. Even though the results did not meet expectations, it formalised a process of opening the energy sector to private investment, and with that, the benefits that will eventually ensure from infusions of capital and technology. Mexico will benefit from these reforms, but so will American businesses and workers. North America can improve its energy security and play a more profound role in stabilising energy markets regionally and globally.”

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Mexico’s Energy Reform: A Look From Inside the Learning Curve

7/21/15 Texas Lawyer

energy -wind_energyThe opening process of Mexico’s energy sector has been well documented. Local and foreign media have extensively reported on how a country that had been closed to private oil and gas investment for close to 76 years, has, in the span of only 18 months, reformed its Constitution, passed implementing regulations, created and strengthened new and existing regulatory bodies, conducted a Round Zero process with its state-owned oil company (Pemex), begun three public bid processes and awarded the first two production sharing agreements in its history.

However, this fast-moving train (in many ways politically fueled) is now facing its most serious challenge to date: attracting oil and gas companies to invest in Mexico. Recent developments in the opening process have shown once again that the oil and gas industry continues to run deep in Mexico’s political, social and economic life and that the country cannot afford a long and prolonged learning curve.
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Mexico’s Oil Auction: short-term disappointment v long-term progress

7/16/2015 Beyond Brics, The Financial Times

By Duncan Wood, Director, Mexico Institute

Oil Rig 2 by Flickr user tsuda Photo by Flickr user tsudaOn Wednesday July 15, Juan Carlos Zepeda, the president of Mexico’s National Hydrocarbons Commission (CNH), announced the results of bidding for exploration contracts in 14 shallow water blocks in the Gulf of Mexico, the first time in over 75 years that production-sharing contracts have been awarded in the country. The results were eagerly awaited by energy industry analysts the world over. As the envelopes began to be opened, the president’s office and the CNH tweeted an inforgraphic stating that the process would be deemed a success if four to seven contracts were successfully awarded.

In the end, only two blocks were awarded, both to a consortium formed by Sierra Oil of Mexico, Talos Energy of the US and Premier Oil of the UK. The government received offers from just nine bidders (five individual companies and four consortia), a pitiful tally given that 49 companies each paid $365,000 to enter the data rooms and 25 of those companies pre-qualified to bid. Of the majors, only ENI and Statoil made bids, leaving most of the big names on the sidelines.

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Mexico Energy Reform Starts with Thud in Offshore Oil Auction

7/15/2015 BloombergBusiness

Oil Rig 2 by Flickr user tsuda Photo by Flickr user tsudaMexico’s first auction of offshore oil leases fell short of the country’s expectations as several majors decided not to participate.

Only two of the 14 shallow-water blocks released on Wednesday received qualifying bids. Exxon Mobil Corp., Chevron Corp. and Total SA passed on the country’s sale of territory in the Gulf of Mexico, 77 years after the country nationalized crude. The 14 percent success rate was less than half the 30 percent to 50 percent goal that the government said would be its minimum for judging the event a success…

“This has to be crushingly disappointing for the government,” Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington, said Wednesday. “It has to be seen as a very clear message that they need to do a lot more to make the oil and gas opening a success.”

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