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

Mexico Government to Support Pemex With $4.2 Billion

4/13/2016 The Wall Street Journal

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MEXICO CITY—Mexico’s government said Wednesday it will support troubled state-oil firm Petróleos Mexicanos, or Pemex, with $4.2 billion in fresh capital and money to make this year’s pension payments, a step some analysts saw as insufficient if oil prices remain low.

Depressed oil prices and declining oil production have led to a liquidity crunch in recent months for Pemex, Mexico’s largest company by sales and the world’s eighth-largest oil producer. The move was widely expected after the government repeatedly said it would provide financial support to Pemex, which contributes nearly 20% of the federal budget.

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Mexico Will Defer Oil Exploration Projects to Slash Spending

3/1/16 ABC

energy- oil pumps 2The state-run oil company, Petroleos Mexicanos, said Monday it will slash spending 22 percent and cut unprofitable production about 100,000 barrels a day as it struggles with liquidity problems and past-due payments to suppliers.

The company, known as Pemex, said it will cut $5.5 billion from its 2016 budget, delay deep-water exploration and decrease production of super-heavy crude because of low world oil prices.

Delaying production and exploration projects will account for about two-thirds of the $5.5 billion spending cut.

Pemex still faces a serious issue: It owes suppliers almost $7 billion, a debt the company acknowledges is a problem.

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