Mexico Becomes Increasingly Important For U.S. Energy Exports

15 Aug 2017   Mexico

U.S. energy sales account for more than 50 percent of Mexico’s current energy imports as Mexican energy reforms open the market and as the country is switching to natural gas-fired electricity production, the Washington Examiner reported on Monday, citing an S&P Global Platts report due to be released this week. “Pipeline imports of U.S. natural gas make up nearly 60 percent of total Mexican natural gas supply, compared to just 22 percent in 2010,” the report, viewed by the Washington Examiner, said. “Platts Analytics expects that U.S. natural gas imports will rise to nearly 70 percent of total supply by 2022,” according to the report. According to the EIA , the U.S.-Mexico energy trade has significantly changed in recent years. Historically, the energy trade has been driven by Mexico’s sales of crude oil to the United States and by U.S. net exports of refined petroleum products to Mexico. The […]

Pemex crude output drops slightly in June, exports up 21 percent

31 Jul 2017   Mexico

Mexican national oil company Pemex’s [PEMX.UL] crude output dropped slightly in June compared with the previous month, while exports rose 21 percent, the company said. Pemex produced 2.01 million barrels per day (bpd) in June, down from 2.02 million in May, the company said. Exports rose to 1.157 million bpd in June, compared with 958,000 bpd in May, Pemex added. About 65 percent of exports went to the Americas, with 15 percent bound for Europe. The Mexican government is in the midst of implementing a sweeping energy reform finalized in 2014 that ended the decades-long production monopoly enjoyed by Pemex, formally known as Petroleos Mexicanos. Mexican crude output has declined over the past dozen years from a peak of 3.4 million barrels per day in 2004. The government expects crude production to average 1.94 million bpd this year.

Dead Bodies Start Piling Up as Fuel Theft Booms in Mexico

26 Jul 2017   Mexico

Buying stolen gasoline in the central Mexican state of Puebla is easy. Pull off the main highway into a busy parking lot, and the black marketeers are waiting in pickup trucks loaded with jerrycans. They’ll siphon the fuel into your tank—boasting as they do that unlike a lot of the country’s regular gas stations, they don’t cheat customers. An error has occurred You have 1 free Businessweek article left. Register for more. Register or Sign In Already a subscriber? Link your Bloomberg Terminal account or your Businessweek subscription account to access all articles. While this illegal curbside commerce has been going on for decades, it has exploded in the past few years and now costs Pemex , Mexico’s state oil company, more than 20 billion pesos ($1.1 billion) a year. The huachicoleros , as the fuel thieves are known in Mexico, dig up pipelines and hijack tanker trucks. These […]

Mexico opens gas infrastructure capacity to bidders

21 Jul 2017   Mexico

Mexico’s government announced it held its first auction to access capacity to natural gas infrastructure as part of the country’s sweeping energy reforms. Hundreds of companies placed bids to access the capacity in the estimated 6,000 miles of natural gas pipelines in the country. According to the U.S. Energy Information Administration, demand exceeds available capacity on the pipeline system. “Companies expressed high interest in cross-border interconnections with flows from southern Texas to Mexico on both private and CENAGAS-operated transmission pipelines,” EIA stated . CENEGAS is the Spanish-language abbreviation for Mexico’s National Center for Natural Gas Control. In a profile, the EIA said Mexican reform efforts enacted by President Enrique Peña Nieto could eventually sway internal market dynamics, but for […]

Next Mexico deepwater oil tender may draw from three Gulf basins

18 Jul 2017   Mexico

 Mexico will announce later this week the bid terms and blocks up for grabs in its next deepwater oil tender, which may include the first areas from the Cordilleras Mexicanas basin, a senior official said on Monday. The Cordilleras Mexicanas deepwater basin is home to national oil company Pemex’s Lakach natural gas project and located east of the Gulf Coast port of Veracruz. Mexico’s first deepwater oil auction last December included blocks from the Perdido Fold Belt straddling the U.S.-Mexico maritime border, and the Salina basin further to the south. For the next deepwater round, the energy ministry is also looking at areas in the Cordilleras Mexicanas basin, said Juan Carlos Zepeda, head of the National Hydrocarbons Commission (CNH), the oil regulator that runs the auctions. “The auction might include blocks from (all) three basins,” he said. The auction will likely take place in January, […]

Major oil discovery heralded offshore Mexico

13 Jul 2017   Mexico

An energy company working off the eastern coast of Mexico said Wednesday it made a discovery that could hold as much as 2 billion barrels of oil. Talos Energy, working alongside joint venture partners Sierra Oil and Gas and Premier Oil, said it confirmed a discovery at the Zama-1 exploration well off the coast of Mexico. Initial estimates put the reserve potential at between 1.4 billion and 2 billion barrels of oil, which exceeded early expectations. “This is both a historic and significant discovery,” Talos President and CEO Tim Duncan said in a statement . Sierra Oil and Gas, a Mexican company, is the majority stakeholder in the partnership. The discovery follows similar claims made by Italian energy company Eni in March, which confirmed […]

Billion-Barrel Mexico Find Could Spur Rush on Next Oil Auctions

13 Jul 2017   Mexico

A billion-barrel crude discovery in Mexico could be just the lure the country needs to boost investment from oil majors as it lacks the wherewithal to reverse years of sagging output.  At a time when global oil prices were cratering, and drillers were nervously cutting exploration funds, Mexico’s earliest auctions drew spotty interest. Since then, however, European drillers led by Italy’s Eni SpA have increasingly become involved. The find in Mexico’s shallow waters could drive added interest — and higher bids — in future auctions as the government seeks to boost production that’s fallen by a third in the past decade.  The most important business stories of the day. On Wednesday, Premier Oil PlcSierra Oil & Gas and Talos Energy LLC announced the first Mexican discovery by explorers other than state-owned Pemex in 80 years, a reservoir with an estimated 1.4 billion to 2 billion barrels. With new auctions set for the end of the year, the find promises to rev up interest in Mexico’s energy riches moving forward, said Pablo Medina, an analyst at the consulting firm Wood Mackenzie Ltd.

“Future bids will likely be more aggressive,” Medina said in a telephone interview. “This obviously increases the attention people will pay. The area contiguous to this block is going to go up in value, no question.”  About a fifth of Mexico’s public budget relies on oil revenue, with production averaging 2.15 million barrels a day last year, the lowest level in more than three decades. That drop in output, combined with lower oil prices, forced the government to cut spending, causing growth in the $1.1 trillion economy to decelerate to the slowest pace since 2013.  Oil has hovered near $45 a barrel in New York, less than half the $100-plus it reached in 2014, as global supplies remain stubbornly high. The West Texas Intermediate benchmark closed at $45.49 on Wednesday.

Mexico Awards 21 Oil and Gas Blocks in Two Auctions

13 Jul 2017   Mexico

The Mexican government on Wednesday awarded 21 oil and gas blocks across the country in two auctions which put private-sector interest in developing gas in Mexico to the test. In a first auction of mostly gas fields, exploration and production licenses were awarded for seven out of 10 areas, nine of them in the Burgos basin of northeastern Mexico. Sun God Energía de México, a unit of Canada’s Sun God Resources, in…

Mexico Sees Another Four Oil Tenders By End-2018

10 Jul 2017   Mexico

Mexico is planning to hold four more oil and gas block tenders by November 2018 as part of efforts to ensure the sustainability of its energy industry and make better use of its hydrocarbon reserves. Speaking at a news conference, Energy Minister Pedro Joaquin Coldwell said that in addition to the three auctions already announced, there will be a fourth one, offering a mix of shallow and deepwater blocks, as well as shale gas deposits. November 2018 marks the end of President Enrique Pena-Nieto’s six-term, and he cannot seek reelection, Reuters notes. A potential successor, leftist Andres Manuel Lopez Obrador, who has often criticized the energy reform Pena-Nieto started when he came into office, has pledged to hold a referendum to remove some parts of this reform. If Lopez Obrador wins, he may put an end to further oil and gas tenders, which could be among the reasons why […]

Mexico’s Oil Reserves Fall In Spite Of Oil Major Interest

4 Jul 2017   Mexico

In dollar terms, since mid-2015 Mexico has been a net importer of hydrocarbons (oil, natural gas, petroleum products and petrochemicals combined). To date it has been a relatively small and fairly constant amount, but with their oil production declining, and oil prices apparently continuing to fall while natural gas prices may be on the rise, the net cost could now start to increase. (Click to enlarge) 2017 reserve numbers were issued in early June. These used to come from PEMEX, but now look like they come from the government through the National Hydrocarbon Commission (probably as a result of the initiative for oil industry deregulation). Overall all categories of reserves have been falling for some years. The chart below shows oil and total (i.e. including condensate, NGL and natural gas) for proved, probable and possible. The production, discoveries and revisions for total petroleum (no figures for crude alone) are […]

Trump Approves New U.S.-Mexico Petroleum Pipeline

1 Jul 2017   Mexico, Pipelines, USA

To boost American energy exports, the administration of U.S. President Donald Trump has approved the construction of a new petroleum pipeline from the U.S. to Mexico that “ will go right under the wall, ” President Trump said on Thursday. As part of the ‘energy week’, which promotes U.S. global leadership and dominance in energy, President Trump announced six initiatives “to propel this new era of American energy dominance,” he said. The first initiative is the U.S. to start reviving and expanding its nuclear energy sector. Next, the Department of the Treasury will address barriers to the financing of highly efficient, overseas coal energy plants, President Trump said, mentioning Ukraine as one of the countries that need coal. The third initiative is the petroleum pipeline to Mexico. The fourth step to growing American relevance in global energy is U.S. Sempra Energy signing a deal to start negotiating sales of […]

MEXICO Oil Reserves and Production

29 Jun 2017   Mexico

In dollar terms, since mid 2015 Mexico has been a net importer of hydrocarbons (oil, natural gas, petroleum products and petrochemicals combined). To date it has been a relatively small and fairly constant amount, but with their oil production declining, and oil prices apparently continuing to fall while natural gas prices may be on the rise, the net cost could now start to increase. 2017 reserve numbers were issued in early June. These used to come from PEMEX, but now look like they come from the government through the National Hydrocarbon Commission (probably as a result of the initiative for oil industry deregulation). Overall all categories of reserves have been falling for some years. The chart below shows oil and total (i.e. including condensate, NGL and natural gas) for proved, probable and possible. The production, discoveries and revisions for total petroleum […]

Mexico Awards 10 of 15 Blocks in Oil Auction

20 Jun 2017   Mexico

Mexico awarded 10 blocks of oil and gas for exploration and development to bidders from 10 different countries, including some of the world’s major oil companies, at an auction in the capital Monday. Of the 15 blocks offered, all of them located in shallow waters of the Gulf of Mexico, five went unclaimed, while 10 were awarded to bidders that competed based on the portion of operating profits offered to the Mexican…

Mexico awaits next oil round with cautious optimism

17 Jun 2017   Mexico

A flare stack of the refinery of Mexico’s national oil company Pemex is seen in Cadereyta, Mexico, December 20, 2016. Mexico is looking forward to its next round of offshore oil auctions on Monday with guarded optimism thanks to robust interest from oil majors for the shallow-water tenders. On Monday, Mexico auctions 15 oil and gas blocks along the southern coastal waters of the Gulf of Mexico in the next stage of the country’s historic opening of the industry following a 2013-14 energy reform. In December 2013 Congress changed the constitution to end a 75-year production and exploration monopoly enjoyed by state oil company Pemex in a bid to reverse years of declining output. Among the companies that prequalified to compete are Chevron Corp, ConocoPhillips, Eni SpA, Repsol SA, Royal Dutch Shell Plc, Total SA and China National Offshore Oil Corporation (CNOOC Ltd). All told, 20 companies signed up […]

Gas Looting In Mexico Turns Deadly

11 May 2017   Mexico

On May 3, a government investigation into illegal pipeline taps in the central state of Puebla turned violent. Gunmen using local civilians as human shields opened fire on army officials, leaving 10 dead . This Sunday, less than two weeks after the tragic event, a tapped pipeline in the nearby town of Nenetzintla erupted in flames. Image source: Univision noticias Don’t Buy Gold. Buy This Instead… This small company could be one of the biggest winners of the coming gold boom. Backed by a billionaire resource investor and management dream team they could be the next big thing in the space. Click here to find out more (Click to enlarge) Mexico loses an estimated 20,000 barrels of gasoline daily to theft — about three times the daily gas consumption of Washington, DC, according to Public Radio International. That’s a loss of as much as $4 million daily, ranking the […]

Mexico’s Pemex Raises Oil Output, Fuel Production In Q1

5 May 2017   Mexico

Mexico’s state energy major Pemex has increased its oil output and the amount of crude it feeds into its refineries, with exports to the U.S. and Asia declining over the first quarter of the year by 3.6 percent. The company reported a net profit of US$4.67 billion (88 billion pesos) for the period, up from a loss of US$3.29 billion (62 billion pesos) a year earlier, boasting revenues of US$18.53 billion (349 billion pesos). This was the second quarter with a positive net performance for the company, after eight quarters in the red. Crude oil output, Pemex reported, averaged 2.018 million bpd in the period, in line with company targets. Offshore production in the Gulf of Mexico accounted for the bulk of the output, at 81 percent, versus 19 percent for onshore production. Refinery runs jumped by 21 percent in the three-month period, Pemex also said in the presentation […]

Pemex seeks investors for its refineries, but who’s buying?

5 May 2017   Mexico

Sweeping energy reforms have turned Mexico into one of the world’s most attractive offshore prospects, but one segment is getting no love from U.S. investors: the nation’s aging refineries. Efforts by Mexico’s state-owned oil company Pemex to attract about $5 billion in capital to help modernize its two largest refineries so far have proved futile, according to two people familiar with the process who declined to be named because they were not authorized to speak publicly. The company is seeking a joint venture partner for its Salina Cruz refinery on the West Coast. It’s also looking for an investor to complete construction of a coking unit to process heavy crude at its Tula refinery just north of Mexico’s capital. Among those to rebuff overtures from Pemex over the […]

Mexican Soldiers, Alleged Fuel Thieves Killed in Shootouts

5 May 2017   Mexico

Clashes between soldiers and alleged fuel thieves left 10 people dead and nearly a dozen more injured in central Mexico, the military and state officials said Thursday. Four soldiers and six civilians died in the two clashes Wednesday night in Palmarito, a town in Puebla state that straddles the expressway linking Mexico City and the port of Veracruz, about 110 miles southeast of the Mexican capital. Ten soldiers and a…

What Mexico’s Falling Exports Mean For Oil Prices

3 May 2017   Mexico

Oil prices are unable to get up off the canvas, as signs of global market rebalancing continue to be errant. With the first weekly EIA report of the month on deck tomorrow, hark, here are five things to consider in oil markets today: 1) Saudi Aramco officially took full control of the Port Arthur refinery yesterday, after breaking up its joint venture with Shell and separating the assets. Saudi Aramco assumes full ownership of the JV name, Motiva Enterprises. Port Arthur is the largest refinery in North America with a capacity of 600,000 bpd, and the deal means Saudi Aramco maintains a solid foothold for its crude in the U.S. market. As for flows to the refinery, we can see from our ClipperData they should not change much, given Saudi grades already account for over 70 percent of imports: (Click to enlarge) 2) In terms of the OPEC / […]

Mexico’s Pemex approves new deep water Gulf joint venture

28 Apr 2017   Mexico

The logo of Mexico’s state-owned company Pemex is pictured at a refinery in Cadereyta, on the outskirts of Monterrey, Mexico, April 20, 2017. The board of Mexico’s state-owned oil company Pemex on Thursday approved its second-ever deep water joint venture covering the Nobilis-Maximino block in the country’s territorial Gulf waters. Reuters revealed details of the plan last week. (Reporting by David Alire Garcia)

Mexico’s Pemex will look to repeat new hedging program

26 Apr 2017   Mexico

 Mexican state-owned oil company Pemex will consider repeating a recently instituted hedging program in future years, as it looks to firm up its balance sheet and avoid the need for surprise budget cuts, a top executive said late on Tuesday. Petroleos Mexicanos [PEMX.UL], as the company is officially known, reported on Tuesday that it has hedged its output through December, the first time it has done so in 11 years, as an insurance policy against volatile oil prices. The oil hedging program, which will run from May to December and guarantees a price of $42 per barrel for up to 409,000 barrels per day, will cost the company $133.5 million. “It’s important to give the market certainty that faced with […]

Wall St. Gears Up For The World’s Biggest Oil Trade

11 Apr 2017   Mexico, Prices

International banks are preparing for the Hacienda Hedge – the secretive oil deal that has seen Mexico earn billions from successful bets on future oil prices. Detailed in an analysis by Javier Blas for Bloomberg, the history of the Hacienda Hedge is certainly impressive and might incite other countries to try their hand at betting on future oil prices. Or then again, it might not, as Mexico’s success story seems to be kind of unique. Blas interviewed Mexican government officials, traders, brokers, and bankers, and reviewed thousands of documents to compile the history of the bet that bankers await every year and that, contrary to what the Mexican authorities say, could swing the oil market. The story began in 1990, when Iraq’s invasion of Kuwait took one-tenth of the global oil supply off the market, raising prices. The government then accurately predicted that the high prices wouldn’t last, betting […]

Canadian Oil Disruption, OPEC Output Cuts Open Door for Mexico

5 Apr 2017   Canada, Mexico

Canadian crude shipments to the U.S. are poised to shrink just as the effects of OPEC-led output cuts are being felt in the Caribbean. That’s good news for Mexico and other local oil producers. Syncrude Canada Ltd. told customers that they wouldn’t receive any supply in April from its 350,000 barrel-a-day upgrader, according to people familiar with the matter. The plant, which turns bitumen from Alberta’s oil sands into light synthetic crude, moved forward maintenance following a fire last month. Light crude and condensate jumped to the highest level in more than a year last week, and Western Canadian Select on Monday was the strongest since June 2015, when wildfires disrupted oil sands production. The loss of some Canadian shipments comes just as U.S. refiners are returning from seasonal maintenance and shipments from the Middle East are declining. Mexico stands to benefit from the disruption, as higher heavy Canadian […]

Are Mexico’s Oil Reserves Almost Depleted?

5 Apr 2017   Mexico

Mexico’s oil and gas regulator said last week that the country’s proved hydrocarbon reserves will drop by 10.6 percent in 2017. This forecast, coupled with the lower oil production that state company Petroleos Mexicanos (Pemex) reported for yet another year in 2016, is painting a rather bleak picture of Mexico’s reserves. Without resumption in investments and more drilling, and if no significant finds occur, Mexico will be running out of reserves within 9 years , according to an official from the National Hydrocarbons Commission. However, the energy reform that ended Pemex’s monopoly and allowed foreign companies to invest in Mexico’s oil exploration and production is expected to start yielding results by the end of this decade. The deepwater bidding round last December attracted major international oil companies, and Mexico awarded blocks to consortia including Chevron, Exxon, Statoil, BP, Total, and China Offshore Oil Corporation. In addition, the analysts are […]

Canadian Oil Disruption, OPEC Output Cuts Open Door for Mexico

4 Apr 2017   Mexico

Canadian crude shipments to the U.S. are poised to shrink just as the effects of OPEC-led output cuts are being felt in the Caribbean. That’s good news for Mexico and other local oil producers. Syncrude Canada Ltd. told customers that they wouldn’t receive any supply in April from its 350,000 barrel-a-day upgrader, according to people familiar with the matter. The plant, which turns bitumen from Alberta’s oil sands into light synthetic crude, moved forward maintenance following a fire last month. Light crude and condensate jumped to the highest level in more than a year last week, and Western Canadian Select on Monday was the strongest since June 2015, when wildfires disrupted oil sands production. The loss of some Canadian shipments comes just as U.S. refiners are returning from seasonal maintenance and shipments from the Middle East are declining. Mexico stands to benefit from the disruption, as higher heavy Canadian […]

Down 10%, Mexico Oil Reserves Gone in 9 Years Without New Finds

1 Apr 2017   Mexico, Prices

Mexico’s existing oil reserves are dwindling so fast the country could go dry within nine years without new discoveries. That’s the message from the National Hydrocarbons Commission, which said Friday that the reserves fell 10.6 percent to 9.16 billion barrels in 2016, from 10.24 billion barrels a year earlier. Once the world’s third largest crude producer, Mexico’s proven reserves have declined 34 percent since 2013. The decline in proven reserves is driven by record-low drilling activity the last three years, according to CNH Commissioner Hector Acosta. State-owned producer Petroleos Mexicanos drilled 21 wells last year, a record low, after averaging 31 per year since 2010. “If there isn’t drilling, it is going to be difficult to incorporate new finds,” Acosta said. “The production figures and indicators that we are observing, tell us that there are flaws in the drilling activities being carried out by Pemex.” The diminished production comes […]

Newest Texas Refineries Plan to Turn Shale Into Fuel for Mexico

29 Mar 2017   Mexico, Shale Oil

The newest oil refineries in Texas are looking to join the hottest two plays in the North American oil industry. Raven Petroleum LLC and MMEX Resources Inc. are building refineries in the Eagle Ford and Permian Basin that will process ample local supplies of light crude into gasoline and diesel. The fuel will be shipped on existing rail lines across the border to Mexico, where the government has opened the market to foreign competition, attracting companies including BP Plc and Glencore Plc. U.S. shale drillers have doubled the number of rigs seeking oil since May, with most of the gains seen in Texas. Production nationwide is expected to approach the all-time high from 1970. At the same time, Mexico’s gasoline demand is outpacing local supply, forcing the nation to increase imports, which government data show grew 3 percent year-on-year in 2016. “It looks like they are a set of […]

Analysis: Mexico refinery output rebounds as product imports move lower

28 Mar 2017   Mexico

Refinery production in Mexico is showing some recovery this year after the big drop experienced in 2016, an uptick that might have contributed to lower product imports so far this year. However, the dent in fuel imports might not be very significant, according to shipbrokers and Platts price data. Mexico’s refinery throughput registered a 1.60% increase to 930,433 b/d in February from January after rising 19.10% to 915,807 b/d that month from December 2016, according to energy ministry data. “Some maintenance work has been completed [in the refineries] and the non-planned stoppages have been reduced,” a source familiar with state-owned Pemex operations said about the increases. Article continues below… US Marketscan provides you with a daily market overview of the major refined products in the United States delivered via e-mail. It carries spot prices for all key products traded in the US market. Gasoline, heating oil, jet fuel, residual […]

Oil breakthrough for Mexico with Eni discovery

24 Mar 2017   Mexico

Italian energy company Eni said Thursday it confirmed the potential for oil offshore Mexico in the first drilling campaign by a foreign company since 2013. Eni said it confirmed the presence of oil in the Amoca-2 well, located in the shallow waters in the Campeche Bay near Mexico’s southern tip. CEO Claudio Descalzi said the discovery is a first for his company in Mexico and the first by a foreign company since national energy reforms were enacted in 2013. “This important discovery comes in a country where Eni has not yet operated and confirms our exploration capabilities,” he said in a statement . The company said the reserve potential from the Amoca-2 well was still being examined, but it estimated the prospects were […]

Is Mexico’s Oil Boom Under Threat?

28 Feb 2017   Mexico

In 2013, Mexican President Enrique Pena Nieto launched the Reforma Energética (RE) to reverse the nation’s decline in oil production and encourage green energy initiatives by ending the monopoly of Petróleos Mexicanos (PEMEX) in the nation’s fossil fuel sector and opening up opportunities for foreign direct investment. Now, four years after the reforms began, a new presidential hopeful is threatening to derail the liberalization and review any contracts that have been signed since the entire process began. Lopez Obrador, who currently polls in first place to be elected for Mexico’s top public office in 2018, has argued that the current government’s position of inviting foreign funds to its nation is unconstitutional. Recognizing that the reforms have created economic opportunities for thousands of Mexican students and professionals, the candidate has toned down his rhetoric, suggesting a referendum before any decisions regarding the future of the RE are made. Reuters reports […]

Mexico’s Pemex sharply reduces losses as oil prices rise

28 Feb 2017   Mexico

Mexican state-owned oil company Pemex on Monday reported a much smaller fourth-quarter loss, due in large part to higher crude prices. The loss narrowed to $1.58 billion (32.6 billion pesos) from $9.8 billion a year earlier. “Pemex’s finances are today stable with positive trends; however, we believe there is certainly room for improvement,” Chief Financial Officer Juan Pablo Newman said on a conference call with analysts. Revenue at the company officially known as Petroleos Mexicanos rose more than 20 percent to $15.67 billion, according to a filing to the Mexican stock exchange. The price of Mexico’s crude oil export mix jumped by 22 percent during the quarter to average nearly $41 per barrel. Still, Pemex has not posted a quarterly profit since 2012. Long used as a cash cow for […]

Mexico turns to the Jurassic era for shale oil

21 Feb 2017   Mexico, Shale Oil

Mexico’s plans to develop its shale oil resources have finally taken a step forward following years of largely fruitless efforts by the state owned company Pemex. Canada’s Renaissance Oil and Russia’s Lukoil are joining forces to develop the Amatitlan block of the Chicontepec region. They aren’t interested in the shallower tight oil, but in the stack’s deeper Pimienta shale formation, which is what they consider Mexico’s Eagle Ford. Renaissance and Lukoil agreed to a $60 million accelerated development plan for the Amatitlan block for 2017, which will include workovers of existing wells, and the drilling of new wells. The Pimienta formation, located in the Upper Jurassic layer of the Chicontepec, is an important play for the future production of Mexico, as output has been trending lower. Renaissance estimates original oil in place in the Amatitlan block at 4.2 billion barrels of oil equivalent, and estimated the Pimienta section at […]

Mexico says gasoline costs to fall slightly, prices set daily next week

18 Feb 2017   Mexico

A man points a nozzle at the camera at a Pemex petrol station in Mexico City, Mexico February 3, 2017. Mexico’s Finance Ministry said on Friday that national gasoline prices would fall 2 Mexican cents per liter on Saturday, but prices would be set daily beginning next week as the country moves toward a free market in gasoline. The ministry said in a statement that maximum prices would be published daily, with Saturday’s price holding until the next update on Tuesday. Prices will be set going forward on the web page of the Energy Regulator Commision ( Mexico raised gasoline prices at the start of the year, and the 14 percent hike in regular gas prices sparked protests and looting around the country. The hike helped drive the annual inflation rate in January to its highest level in more than four years. The government is expected to adjust the […]

Mexico City, Parched and Sinking, Faces a Water Crisis

17 Feb 2017   Climate, Mexico

On bad days, you can smell the stench from a mile away, drifting over a nowhere sprawl of highways and office parks. When the Grand Canal was completed, at the end of the 1800s, it was Mexico City’s Brooklyn Bridge, a major feat of engineering and a symbol of civic pride: 29 miles long, with the ability to move tens of thousands of gallons of wastewater per second. It promised to solve the flooding and sewage problems that had plagued the city for centuries. Only it didn’t, pretty much from the start. The canal was based on gravity. And Mexico City, a mile and a half above sea level, was sinking, collapsing in on itself. It still is, faster and faster, and the canal is just one victim of what has become a vicious cycle. Always short of water, Mexico City keeps drilling deeper for more, […]

Mexico’s Pemex Sets Euro Corporate Debt Record with $4.49 Billion Issue

15 Feb 2017   Mexico

Mexico’s national oil company Petróleos Mexicanos issued €4.25 billion ($4.49 billion) in bonds Tuesday, the largest euro-denominated emerging market corporate bond deal on record. Emerging market investments have recovered from an initial slump after President Donald Trump’s November election victory. Mexican assets in particular sold off after Mr. Trump’s win, with the peso falling by as much as 16% against the dollar in the months…

Trump’s Mexican Standoff May Send U.S. Gas to $2 If Exports End

1 Feb 2017   Mexico

Natural gas prices in the U.S. may tumble about 40 percent if President Donald Trump’s diplomatic showdown with Mexico becomes an all-out trade war. Prices could slide to $2 per million British thermal units or lower if U.S. gas exports to Mexico by pipeline are halted, according to Tudor Pickering Holt & Co. and Again Capital LLC. While analysts with those companies don’t anticipate a complete cutoff, they’re watching closely for signs of any disruption to the shipments, which accounted for as much as 5 percent of U.S. production of the fuel last year. Trump’s push to impose a 20 percent tax on imports from Mexico to pay for a border wall is threatening to reverse a shift toward stronger alliances between the U.S. and its southern neighbor. The nations’ economies have become increasingly intertwined as […]

Mexico’s Growth Slows as Oil Output Drop Outweighs Services

1 Feb 2017   Mexico

Mexico’s growth slowed in the fourth quarter, dragged down by falling oil production, even before the full impact of President Donald Trump’s potential to hurt the economy was fully felt. Gross domestic product rose 0.6 percent from the previous three months, according to preliminary figures released by the national statistics institute Tuesday, matching the median forecast of 16 economists surveyed by Bloomberg. That’s a slowdown from the third quarter, when the economy grew at the fastest pace in three years. From the previous year, GDP expanded 2.2 percent, also matching analyst projections. The outlook for 2017 worsened significantly with Donald Trump’s election in November. Economists have cut growth expectations as his promise to end or overhaul the North American Free Trade Agreement and make Mexico pay for a border wall upset decades of stronger cooperation between the nations, damped investment projections and sent the peso to a record low. […]

Pemex Refinery Output Hits Lowest Since 1990

1 Feb 2017   Mexico

Petroleos Mexicanos ’s refinery output in 2016 fell to the lowest level in 26 years as government budget cuts forced the Mexican state oil company to delay maintenance. Only three of seven major planned maintenance projects were carried out in 2016, while Pemex’s six refineries registered as many as 88 unplanned unit stoppages during the year, according to company documents Bloomberg obtained through a records request. Crude processing fell 12 percent in 2016 compared to a year ago to 933,062 barrels a day, the lowest yearly volume since 1990, when Mexico’s energy information agency, an arm of the Energy Ministry, started publishing the data. “The key issue is that Pemex needs resources in order to boost output; without that it is very difficult to expect a more positive outcome,” Ixchel Castro, senior analyst for Latin American oils and refining markets at Wood Mackenzie, said Monday by phone from Mexico […]

Trump’s Border Tax Could Further Reduce Mexico Oil’s U.S. Ties

31 Jan 2017   Mexico

U.S. President Donald Trump’s proposed tariff on Mexican goods has the country’s oil industry considering just how much it needs the American market. A 20 percent border tax to build a wall between Mexico and the U.S. means Canadian oil-sands competitors will enjoy a leg up and U.S. motorists will suffer higher prices at the pump due to the tariff on Mexican oil. Pemex , Mexico’s principal producer, isn’t waiting for Trump’s plan to come to reality. The state-owned company has already been reducing its reliance on the U.S. In the first 11 months of 2016, Mexico exported 48 percent of its crude to the U.S., down from 69 percent in 2014, according to Mexico’s Energy Information Agency data. Asian buyers took 26 percent while Europe accounted for 23 percent. “Mexico has a strong relationship with clients in Asia and Europe,” said Ixchel Castro, a senior analyst for Latin […]

U.S. Gas May Be One Trade That Survives Trump’s Mexico Clash

28 Jan 2017   Mexico

U.S. Stands to Suffer in Border War With Mexico It could take more than a political standoff between President Donald Trump and Mexico to keep U.S. shale gas from flowing south. While Mexico works to reverse declining oil and gas production, the nation’s burning record amounts of natural gas pulled from tight-rock formations north of the border. Pipeline deliveries of the fuel from the U.S. have more than doubled in the past two years, and Mexico’s now tied with Chile as the biggest buyer of tanker shipments of U.S. liquefied natural gas leaving Louisiana’s coast. The gas exports stand in sharp contrast to the showdown threatening one of the world’s biggest bilateral trading relationships. Mexico’s President Enrique Pena Nieto canceled a meeting with Trump Thursday after the U.S. leader blasted him on Twitter for refusing to pay for a wall along […]

Mexico’s Pemex imports first diesel cargo via train from U.S.

18 Jan 2017   Mexico

Mexico’s state oil company Pemex began receiving imported fuel by train at a new privately run terminal for the first time in January as companies expand storage and transportation operations under the country’s energy opening, a senior executive said in an interview. The cargo of just under 60,000 barrels arrived from Port Arthur, Texas, on Jan. 7 at the new private San Jose Iturbide storage terminal in central Guanajuato state via train, marking another first for the company which normally uses pipelines and seaports for fuel imports. Isaac Volin, head of Pemex’s trading arm PMI Comercial Internacional, said the initial cargo was used to test the new process, but he expects similar diesel cargos to supply the terminal via rail about every eight days. “It’s […]

Despite Plunging Peso, Wildcatters Try Making Money on Oil in Mexico

16 Jan 2017   Mexico

Wildcatters are crossing the border into Mexico to pour money into the country’s recently deregulated energy sector, betting that the plunging peso and other economic stress won’t disrupt their business. Mexico’s privatization of its deep-water reserves and onshore fields, which began 18 months ago, represents a new opportunity for energy explorers and investors that have been competing against each other in U.S. and Canadian oil…

Pemex Is So Cash-Starved It’s Selling a Little League Baseball Field

14 Jan 2017   Mexico

Pemex has put a kids’ recreation park up for sale as it combs through its assets searching for property it can exchange for needed cash. Mexico’s state-run oil company, which has reported 16 consecutive losses and is nearly $100 billion in debt, is auctioning off a little league baseball field and a sports complex used by employees in the eastern state of Veracruz, according to a report by El Universal reviewing the company’s annual property sales plans. A Pemex press official confirmed the story is accurate. Mired in the company’s worst financial crisis in its history, Chief Executive Officer Jose Antonio Gonzalez Anaya has reiterated on several occasions that the company intends to sell its non-strategic assets to generate capital. In an effort to reduce its operating losses and find partners to improve efficiency in a number of areas, Pemex is said to have hired UBS Group AG to […]

Mexico president tries again to calm anger over gas hike

13 Jan 2017   Mexico

Mexico’s president tried again on Thursday to calm anger over the big jump in gasoline prices this month amid a historically weak currency and continued threats by Donald Trump to steer manufacturers back to the United States. In his latest speech, the deeply unpopular President Enrique Pena Nieto outlined measures that he said would help families mitigate the impact of the price hike. Yet steps like notifying more than 3 million Mexicans older than 65 that they have money in government retirement accounts seemed unlikely to dissipate the outrage that led to widespread looting in parts of the country and marches calling for his resignation. Earlier this week, Pena Nieto promised to police price increases for staple goods and invest in modernizing public transportation. But it was difficult to see how any of that could make up for the overnight 20 percent […]

Oil, Trump, leave Mexico in dire economic straits

12 Jan 2017   Mexico

Mexico, the second largest economy in Latin America, is facing economic headwinds because of lower oil prices and U.S. trade policy, a study finds. The New Year brought new challenges to Mexican President Enrique Peña Nieto as U.S. President-elect Donald Trump bore down in a series of pre-inauguration critiques targeting the nation’s staple automotive manufacturing sector. The Mexican peso has declined more than 10 percent since Trump’s surprise election victory in November and foreign investors are wary of taking action given the president-elect’s threats on higher tariffs and stiffer taxes for cars made for the U.S. market. Elsewhere, the Mexican president has faced domestic unrest after retail fuel prices skyrocketed following a deregulation effort that rang in 2017. An […]

600 Hundred Arrested And 1 Dead As Mexican Gas Price Protests Intensify

6 Jan 2017   Mexico

Some 600 people have been arrested, one policeman killed and around 300 stores looted as protests intensify in Mexico following the weekend decision to hike fuel prices by 20 percent, the Associated Press reports . Citing Mexican business chambers, the news agency said that supplies of basic goods and fuel are under threat as protesters blockade highways, ports and terminals and the situation intensifies to chaos on the streets and looting. As one of the more difficult to implement parts of the government’s sweeping energy reforms, deregulation required a 20 percent increase in fuel prices that has enraged the population. On New Year’s Day, when the policy took effect, the cost of a gallon of standard-grade unleaded fuel was US$2.95, up 14 percent from the price of US$2.60 on 31 December. The price of premium fuel rose by up to 20 percent, according to the LA Times. This situation […]

Mexican Drug Cartels Threaten To Blow Up Gas Stations Over Massive Price Hike

3 Jan 2017   Mexico

While Mexico has reasons to be concerned about the upcoming presidential inauguration of Donald Trump, who has vowed to make life, and especially trade relations, for Mexicans far more “complicated” under his administration, the population of Mexico has far more pressing problems. The finance ministry’s recent announcement that it would raise the price of gasoline by as much as 20.1 percent to 88 cents per liter while hiking diesel prices by 16.5 percent to 83 cents, went into effect on January 1, welcoming in the new year with a surge in the price of one of Mexico’s most important staples – leading to widespread anger, protests and in some cases violence. As Telesur reports , the people of Mexico “are entering the New Year in a state of rage and anxiety” with protests planned for Sunday to strongly denounce the government’s huge hike in gasoline prices. The sharp rise […]

Weaknesses in Mexico’s oil sector are creating ‘chaos’ during the holiday season

2 Jan 2017   Mexico

The holiday season has been a little less merry for car owners in Mexico as gasoline shortages in many parts of the country have forced grumbling customers to contend with hours-long lines. In hard-hit parts like Leon, in Guanajuato state, filling up your tank often means driving around from one station to the next just to find one that has fuel. “It’s chaos,” said Guadalupe Lopez, a customer service worker in Leon who visited eight stations on a recent day before she finally found a pump that wasn’t dry. “One worker told me they had gone a day and a half without supply.” Rumors are swirling of gas station owners purportedly hoarding fuel ahead of a price deregulation that takes effect Sunday , and will let them […]

Mexicans are outraged over a big hike in gas prices on Jan. 1

2 Jan 2017   Mexico

Mexican motorists awoke to a shock as gasoline prices at the pump shot up by more than 20 percent in some corners of the country on the first day of the year, sparking panic buying, street protests and even a call by one prominent lawmaker for a “peaceful revolution.” “If the price of gasoline goes up, we’re going to pay more [for] everything else,” said Iván Rosales, an employee at a trucking company who protested the price hike Sunday at the iconic Ángel de la Independencia monument in Mexico City. “I don’t mind paying [gasoline] taxes, but where are the services?” Rosales said, pointing to potholes on the street. “[Politicians] always prefer pocketing the money instead of spending it as they should.” The hike, the result […]

US gasoline exports to Mexico hit record high on refinery issues, strong demand

31 Dec 2016   exports, Mexico, USA

Mexico’s record-low refinery production and growing consumer demand helped push US gasoline exports there to a new high in October, a trend that has boosted prices in both countries. Gasoline exports to Mexico climbed 1.86 million barrels to 12.08 million barrels in October, according to US Energy Information Administration data released Friday, the highest total since that data started being tracked in 1993. The previous peak was 11.42 million barrels in December 2010. Mexico is by far the largest importer of US gasoline, taking in 45.8% of the 177.4 million barrels of finished gasoline the US exported through October of this year. That export demand has pushed prices to unseasonably strong levels in the US Gulf Coast, which typically sees demand weaken during the fall and winter months. The outright price for Gulf Coast pipeline-delivered conventional gasoline was assessed at $1.7098/gal Thursday, its highest price since August 18, 2015. […]