Mexico

This Unexpected Move Could Derail Mexico’s Oil Boom

9 Oct 2017   Mexico

Just as Mexico’s oil industry was starting to get off the ground with foreign players entering, Mexico is throwing a wrench in the works with its consideration of new regulations that could turn off private interest for its significant oil reserves. This summer, Mexico’s landmark energy reform—ending decades of Pemex’s monopoly—started to pay off when a consortium including foreign companies struck oil in a world-class discovery off the Mexican coast. Now Mexico wants to get its hands on some of that oil in a move that could threaten to derail future interest in Mexico’s oil industry. The recent discovery could potentially extend into a neighboring owned by state-run Pemex, so Mexico is currently drafting regulations on how to share this discovery, and other discoveries that could follow. Anxious about how the country would decide to split royalties or proceeds, the consortium—consisting of Talos Energy as operator and joint venture […]

Egyptian Company to Develop Mature Oil Fields With Mexico’s Pemex

5 Oct 2017   Egypt, Mexico

State oil company Pemex’s effort to secure a partner for two shallow-water fields in the Gulf of Mexico fell flat as none of the registered companies presented bids. Cheiron, part of the Pico Group, will join Pemex in the Cárdenas and Mora fields in the southern state of Tabasco, which are estimated to contain combined reserves of about 93 million barrels of light and extra light crude. Cheiron specializes in developing mature fields. Cardenas and Mora are in the second of three areas for which Pemex was seeking partners at Wednesday’s auctions. No bids were made for two shallow-water fields in the Gulf of Mexico—Ayín and Batsil—under a production-sharing contract. Bids for the onshore Ogarrio field are scheduled for later Wednesday. All three auctions are for 50% stakes in the projects. Ayín and Batsil are located in the southern Gulf of Mexico near Pemex’s main offshore-producing region, although at […]

Egyptian Company to Develop Mature Oil Fields With Mexico’s Pemex

5 Oct 2017   Egypt, Mexico

State oil company Pemex’s effort to secure a partner for two shallow-water fields in the Gulf of Mexico fell flat as none of the registered companies presented bids. Cheiron, part of the Pico Group, will join Pemex in the Cárdenas and Mora fields in the southern state of Tabasco, which are estimated to contain combined reserves of about 93 million barrels of light and extra light crude. Cheiron specializes in developing mature fields. Cardenas and Mora are in the second of three areas for which Pemex was seeking partners at Wednesday’s auctions. No bids were made for two shallow-water fields in the Gulf of Mexico—Ayín and Batsil—under a production-sharing contract. Bids for the onshore Ogarrio field are scheduled for later Wednesday. All three auctions are for 50% stakes in the projects. Ayín and Batsil are located in the southern Gulf of Mexico near Pemex’s main offshore-producing region, although at […]

Shallow-Water Oil Auctions Fall Flat for Mexico

5 Oct 2017   Mexico

More bad news for Mexico’s state-run Pemex as the live auction for its shallow-water Ayin-Batsil oil play in the Gulf of Mexico failed to attract any offers for partnership. This morning, Mexico’s Hydrocarbon Commission (CNH) officially declared the Ayin-Batsil abandoned. Mexico is still hoping to find partners for onshore fields in the coming days. The live auction also offered up the Cardenas-Mora and Ogarrio oilfields, but results have not yet been published. Ayin-Batsil is believed to contain 359 million barrels of oil equivalent in proven, probable and possible reserves. Between 1988 and 2015, 10 wells have been drilled in the shallow-water block, including eight wildcat wells and two appraisal wells. (Click to enlarge) Pemex was looking for a 50:50 partnership for Ayin-Batsil, with the partner taking operatorship. A total of 10 companies had prequalified earlier in September to participate in the three-field auction. Those pre-qualified included Egypt’s Cheiron Holdings […]

How Mexico’s Energy Reform Will Impact The U.S.

22 Sep 2017   Mexico

The liberalization of Mexico’s energy sector has the potential for big impacts on American operations, as the country is a major market for U.S. oil and gas. Demand for oil, gas and refined products is growing quickly in Mexico. According to a recent webinar by Argus, the number of passenger vehicles in Mexico tripled from 2000 to 2014, and the company’s population growth rate is twice the average in OECD countries. Lagging oil and gas production has hurt Mexico Unfortunately, Mexico’s domestic production has lagged behind demand. The country has been forced to import increasing volumes from the U.S. Argus reports that gasoline imports from the U.S. in the first half of 2017 averaged 373 MBOPD, up 60 percent from 2015 levels. Imports of crude oil and natural gas have grown similarly. (Click to enlarge) According to EIA data, U.S. exports to Mexico of crude and refined products have […]

Mexico’s 2018 Election Could Derail Its Oil Boom

18 Sep 2017   Mexico

Three years ago, Mexico opened its energy sector to private investments in a landmark energy reform that ended more than seven decades of monopoly of its state firm, Pemex. Now Mexico has begun liberalizing gasoline prices as well. After an initially slow start to attracting foreign investment, Mexico’s offshore oil auctions have recently started paying off, after an alliance (including foreign firms) announced a “world class discovery” estimated to hold more than 1 billion barrels of oil in place—one of the major global discoveries in the past five years. In addition, supermajors Exxon, Chevron, and BP are opening or plan to open their first service stations to tap into the Mexican refined products market. Shell is the latest of Big Oil that entered the retail market, pledging US$1 billion in investment over the next 10 years. Things are currently looking up for foreign investments in Mexico’s energy sector, but […]

China’s CNOOC Begins Oil Partner Hunt in Mexico Deep Waters

16 Sep 2017   China, Mexico

Cnooc Ltd. is searching for partners to develop oil prospects deep into the Gulf of Mexico as the Chinese giant extends its global reach. After bidding alone for exploration rights in Mexico’s first-ever deep-water auction in 2016, Cnooc is seeking deals known as farmouts, a common type of joint venture where a stake in an oil prospect is exchanged for help with drilling and production. The company has yet to choose partners, a Beijing-based spokeswoman for Cnooc said Friday. China, the world’s biggest oil consumer after the U.S., has sought a foothold in crude production everywhere from Africa to Canada as it looks to ensure supplies to its fast-growing economy. Several Latin American countries like Venezuela and Brazil have taken advantage of China’s thirst […]

Mexico’s Biggest Refinery Will Take A Month To Restart

14 Sep 2017   Mexico

The largest crude oil refinery in Mexico, Salina Cruz, will take between three and four weeks to bring back online after the magnitude-8 earthquake that struck the country last week. The refinery is located in southern Mexico, near the offshore epicenter of the quake that has so far killed more than 90 people. The Salina Cruz refinery has a daily throughput of 330,000 barrels of crude but the earthquake damaged its turbogenerators, the chief of the Pemex facility told local media. There is no risk of a shortage of fuels, Carlos Miruetta added, as Pemex had bought additional supplies of oil products after Hurricane Harvey suspended fuel shipments from Houston. Pemex’ chief executive, Jose Antonio Gonzalez Anaya, however, said that putting the refinery back on line would take less time—between two and three weeks. In an interview with Bloomberg, Gonzalez Anaya also said that the company expected to meet […]

At least 58 killed in massive earthquake off Mexico coast

9 Sep 2017   Earthquakes, Mexico

Minutes before midnight, warning sirens blared across this earthquake-anxious capital. This, in itself, was not unusual. Temblors are common here, and in recent years Mexico City has held annual disaster drills, revamped building codes and installed sophisticated sensors to be ready for an emergency. Many residents still have clear memories of the calamitous 1985 earthquake that killed at least 5,000 people here and left a quarter-million homeless. But minutes after the sirens began wailing late Thursday, hanging houseplants started swaying and books tumbled from shelves. Plaster cracked. Streetlights shimmied like reeds in the wind. Lights went black. In pajamas and barefoot, with babies swaddled in blankets, residents rushed out of their apartments to wait in the darkened streets. This was no drill. This was an 8.1-magnitude earthquake, the most powerful one in Mexico […]

Mexico temporarily suspends operations at key refinery after quake

8 Sep 2017   Mexico

Mexican President Enrique Pena Nieto said on Friday operations at the Salina Cruz refinery on Mexico’s southern coast were temporarily suspended as a precautionary measure following a major earthquake nearby. Sponsored

Can Mexico Absorb Texas’ Energy Glut?

8 Sep 2017   Mexico, USA

While the United States, Mexico, and Canada are due to meet for a second round of NAFTA talks on Friday, the Texas Association of Business welcomes proposed U.S. legislation that would expand the ability of a development bank created under NAFTA to invest in energy projects along the border, seeing the Mexican market as an outlet for excess natural gas from Texas. In June, U.S. Senator John Cornyn (R-TX) introduced the North American Development Bank Improvement Act of 2017, which was aimed at boosting the ability of the North American Development Bank (NADB) to continue investing in international land border crossings, natural gas projects, and environmental infrastructure along the U.S.-Mexico border. The bill is currently referred to the Committee on Foreign Relations. “Texas Association of Business and its NAFTA focused Texas-Mexico Trade Coalition believe that more investment in the NADBank could spur additional border infrastructure development across the state […]

Can NAFTA Protect Big Oil From Mexico’s Populist Movement?

7 Sep 2017   Mexico

The second round of NAFTA negotiations that concluded yesterday in Mexico City sought ways to enshrine the 2014 energy sector reforms that the Enrique Pena-Nieto government had launched to overhaul an oil and gas industry monopolized by state-major, Pemex. This monopoly had all the consequences that were to be expected, including underinvestment in new oil and gas discoveries, falling output, and ultimately, a threat to the country’s energy security with increased reliance on imports, especially of fuels and natural gas, from the U.S. The reforms that Pena-Nieto’s government effected involved opening up the Mexican energy market to private participants, with a series of oil and gas auctions conducted in relatively quick succession in a bid to address a situation where energy demand at home is growing but production of energy sources is falling. Yet, this is Pena-Nieto’s last term as president, and the frontrunner for the 2018 election is […]

Shell opens its first retail gas station in Mexico

7 Sep 2017   Mexico

Dutch supermajor Shell said it’s opened its first retail gasoline service station in Mexico, one of the largest gasoline markets in the world. Shell said it opened a service station in a city just north of the Mexican capital, Mexico City. The company said it’s the first part of a 10-year, $1 billion investment in the Mexican energy sector, provided market conditions continue to improve at their current rates. “This is a major milestone for Shell and shows our ongoing commitment to Mexico,” István Kapitány, Shell’s executive vice president of the retail sector, said in a statement . “As the fifth-biggest consumer of gasoline in the world, it is an important and growing […]

Oil Firms That Cheered Regulatory Cuts Are Quaking on Nafta

1 Sep 2017   Canada, Mexico, USA

Energy companies that sat on the sidelines during other recent trade negotiations are getting more involved on Nafta. (Bloomberg) — The Trump administration is easing environmental regulations and opening up territory for drilling as part of the president’s bid to unleash the “vast energy wealth” of the U.S. Yet Donald Trump’s push to rewrite the North American Free Trade Agreement could have the opposite effect. As Nafta negotiations resume Friday, oil industry leaders are desperate to preserve the 23-year-old trade deal that drove a North American oil and gas renaissance and paved the way for $34 billion worth of energy exports to Canada and Mexico last year. “Any changes that disrupt energy trade across our North American borders, reduce investment protection or revert to high tariffs and trade barriers that preceded NAFTA could put at risk the tens of millions of jobs,” said the top oil and gas trade […]

An Energy Independent North America Needs NAFTA

1 Sep 2017   Canada, Mexico, USA

Last year, the bilateral trade of energy (including natural gas, oil and power) between the U.S. and Canada was about U.S $55 billion, with oil being 80 percent of the total. Its dollar amount dwarfs other industries, but negotiators may need to view this vital commodity using a different lens. Beyond size, the upstream oil business between America and Canada reveals big shifts in dollar and volume trade over the past few years. The United States has long been its northern neighbor’s biggest oil customer. Yet since 2014, it’s reciprocally grown to become Canada’s biggest supplier too. As a result of this bilateral exchange of barrels, the growth in the oil trade deficit (from the American perspective) has slowed down somewhat. That’s notable for negotiations. But of more interest is that both countries have pushed out a large portion of their “foreign oil” suppliers. So, the upshot of NAFTA […]

Can Mexico Absorb Texas’ Energy Glut?

29 Aug 2017   Canada, Mexico, USA

While the United States, Mexico, and Canada are due to meet for a second round of NAFTA talks on Friday, the Texas Association of Business welcomes proposed U.S. legislation that would expand the ability of a development bank created under NAFTA to invest in energy projects along the border, seeing the Mexican market as an outlet for excess natural gas from Texas. In June, U.S. Senator John Cornyn (R-TX) introduced the North American Development Bank Improvement Act of 2017, which was aimed at boosting the ability of the North American Development Bank (NADB) to continue investing in international land border crossings, natural gas projects, and environmental infrastructure along the U.S.-Mexico border. The bill is currently referred to the Committee on Foreign Relations. “Texas Association of Business and its NAFTA focused Texas-Mexico Trade Coalition believe that more investment in the NADBank could spur additional border infrastructure development across the state […]

Can Mexico Replicate The U.S. Shale Boom?

24 Aug 2017   Mexico, Shale Oil

Natural gas has been hailed as the bridge between fossil fuels and renewables. Global gas demand has been growing at an average annual 2.3 percent over the last ten years, although it slowed in 2016 to 1.5 percent. The market is oversupplied, which has pressured prices so much as to make the bridge fuel even more attractive especially for emerging economies such as Mexico. Mexico has been slow to develop its gas reserves, however. Until recently, all its natural gas output came in the form of associated gas – the gas that gets extracted as a by-product of oil production. What’s more, the country only recently started to deregulate its energy industry and the regulatory framework for shale gas extraction is wanting in many respects, as Forbes’ Jude Clemente notes . In addition, there are problems with infrastructure, production costs, and shale hydrocarbon extraction know-how. Why shale? Because the […]

Texas sees Mexico as important gas export market

23 Aug 2017   exports, Mexico, USA

The state economy for Texas is capitalizing on cross-border movements of natural gas to Mexico, a director at a state energy regulator said. Texas Secretary of State Rolando Pablos served as the moderator of a bilateral energy forum that counted members of a Mexican energy trade association and Mexico Energy Regulatory Commissioner Guillermo Garcia Alcocer among its panelists. The panel came one month after Mexico’s government held its first auction to access capacity to natural gas infrastructure as part of the country’s sweeping energy reforms. Those reforms could bring in up to $415 billion in investments over the next 20 years as the country establishes links to the rest of the world. Ryan Sitton with the Texas Railroad Commission, the state’s […]

Brazilian Corruption Charges Could Impact Mexico’s Oil Boom

22 Aug 2017   Brazil, Mexico

Last year, Brazilian construction firm Odebrecht and affiliated petrochemical company Braskem pleaded guilty to bribing officials in 12 countries to secure high-paying contracts. The firm agreed to a payment of at least $3.5 billion, the largest penalty in history for a foreign bribery case. Now, months later, the scandal continues to escalate as new allegations pop up. The latest addition to the scandal is Mexican state oil company Pemex, which has now been swept up in the widespread accusations of corruption. While Pemex officials have already been called for testimony in Odebrecht-related investigations back in April , this week the plot thickened. On Saturday accusations surfaced that Emilio Lozoya, the former chief executive of Pemex, accepted $10 million in bribes from Odebrecht in exchange for sending the company lucrative contracts. The bribes allegedly started rolling in in March 2012, when Lozoya began his reign at Pemex, until he left […]

Gasoline demand from Mexican deregulation may pressure Colonial Pipeline

22 Aug 2017   Mexico, Population

A recent output disruption at Mexico’s largest refinery may have contributed to Colonial Pipeline’s June decision to cancel some shipping on its gasoline-only Line 1, USGC gasoline market sources have said. While this was an isolated event, growing Mexican import demand driven by deregulation could continue to put pressure on Colonial’s Texas-to-North Carolina Line, sources said. Colonial in June decided not allocate the 37th cycle on its Line 1, the first such decision since the line’s 42nd cycle in 2011. The disruption over June and July at Mexico’s 330,000 b/d Salina Cruz may have also compounded the overall economic challenges of the USGC-USAC arbitrage over the summer, the sources said, as Latin America became a bigger draw for USGC product. Article continues below… Stay on top of policies, pipelines and prices in a way that only Platts can cover them. Each report covers natural gas and LNG, crude oil […]

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 […]