Exxon, Chevron, Hess in Joint Bid for Mexican Oil

08/18/16 Bloomberg

oil wellExxon Mobil Corp., Chevron Corp. and Hess Corp. have agreed to bid together for rights to drill for crude in Mexico’s deepwater oil areas, according to a person with direct knowledge of the plans.

The three U.S.-based producers have reached a Joint Operating Agreement, which allows the consortium to bid to produce oil in the 10 areas up for auction on Dec. 5, according to the person, who asked not to be identified because the information isn’t public.

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Mexico says it has nearly completed 2017 oil hedge

08/16/16 Reuters

Mexico has nearly completed its oil hedging program for 2017, the country’s finance minister said on Tuesday, adding that what is considered to be the world’s biggest sovereign oil derivatives trade began in mid-June.

Luis Videgaray gave no details on how much crude Mexico was hedging, how much it spent or the average price it paid.

“We have advanced in an important way, we still haven’t finished the process but the vast majority of the options, that is to say the hedge, have already been acquired,” Videgaray said at an event in the northern city of Monterrey.

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Mexico to Auction 15 Shallow Exploration Blocks in Gulf

07/19/16 ABC News 

The Mexican government announced plans Tuesday for an auction of exploration and shared-production rights on 15 blocks of potential oil fields in the shallow waters of the Gulf of Mexico.

The blocks cover 3,440 square miles (8,908 square kilometers) and contain potential reserves of up to 1.58 billion barrels of crude equivalent.

Energy Secretary Pedro Joaquin Coldwell said that the blocks are expected to start producing oil by 2020 and that investment in the projects could reach $11.25 billion over the life of the contracts.

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Oil’s Broken Link to Mexico Peso Has BNP Warning of Bond Exodus

06/22/16 Bloomberg

energy - oil barrelsThe link between oil and the Mexican peso is weakening. That has firms like BNP Paribas SA warning the nation’s bond market could suffer.

While Mexico’s fortunes have long been tied to the price of oil, that relationship has eroded as some investors sell the currency to hedge against global risks, including Britain’s possible exit from the European Union, said Banorte Ixe. So even as crude has climbed 7 percent since the end of April, the peso has plummeted 8 percent.

The slumping peso prompted BNP Paribas SA to say June 17 that there’s “considerable” risk overseas holders of longer-term government bonds called Mbonos may begin to dump the securities. They’ve already chopped their holdings of short-term debt to the lowest since 2009 and an exodus from Mbonos would be a problem for Mexico because foreigners own 42 percent of them.

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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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Mexico’s Alfa Out of Pacific Exploration Restructuring

4/14/2016 The Wall Street Journal

energy - oil barrelsMEXICO CITY—Mexican industrial conglomerate Alfa SAB  made proposals for a restructuring of Canadian-Colombian oil firm Pacific Exploration & Production Corp. but is no longer involved in the process, a company official said Thursday.

Monterrey-based Alfa, which has a 19% stake in Pacific, made serious proposals for improving Pacific’s financial situation, but the oil company chose a different route, Alfa chief financial officer Ramón Leal said in a conference call with reporters.

Pacific said earlier Thursday that it agreed to negotiate a restructuring with private-equity investment firm Catalyst Capital Group Inc. and with creditors, following a recommendation from an independent committee of Pacific’s board. Terms are still being worked on and there is no assurance a deal will be reached.

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New Publications | Global Agenda Council on the Future of Oil & Gas

Mexico Institute Director Duncan Wood has been working with the World Economic Forum’s Global Agenda Council on the Future of Oil and Gas for the past two years. They have now published several short publications and blog posts. Check them out below!

Blog Posts:

What happens when demand for oil peaks

Big oil has a big trust problem – can the industry put that right?

Publications:

Future Oil Demand Scenarios

Trust Challenges Facing Global Oil & Gas Industry

Future of Oil & Gas (synthesis)

Also, check out the Global Agenda Council on the Future of Oil and Gas’ webpage here: https://www.weforum.org/communities/global-agenda-council-on-the-future-of-oil-gas