Mexico

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 (www.gob.mx/cre). 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. […]

Mexico: Gasoline Prices Expected To Rise By As Much As 20 Percent In January

28 Dec 2016   Mexico

Gasoline prices in Mexico will rise by as much as 20 percent at the start of January, the country’s Finance Ministry said Dec. 27, Reuters reported. The price increase was expected and comes as part of a liberalization program for Mexico’s fuel sector. The price of Magna gasoline will jump by around 14 percent to an average price of 15.99 pesos per liter, while the price of Premium gasoline will increase by about 20 percent to an average of 17.79 pesos per liter. The cost of diesel is set to rise by 16.5 percent, to an average price of 17.05 pesos per liter. While energy reform is likely to remain the law of the land in Mexico no matter who wins the country’s 2018 presidential elections , it could face setbacks if leftist candidate Andres Manuel Lopez Obrador wins the vote.

U.S. refiners cash in on Mexico’s record fuel imports

28 Dec 2016   Mexico

U.S. Gulf Coast refiners are cashing in on rising fuel demand from Mexico, shipping record volumes to a southern neighbor that has failed to expand its refining network to supply a fast-growing economy. The fuel trade could top a million barrels per day (bpd) at times in 2017 as Mexico becomes increasingly dependent on the United States for strategic energy supplies and providing business worth more than $15 billion a year to refiners such as Valero ( VLO.N ), Marathon Petroleum ( MPC.N ) and Citgo Petroleum. The rise in Mexico’s fuel imports reflects an economy that, after expanding for 27 quarters in a row even amid a public austerity plan, has been unable to increase its refining output to satisfy the consistent growth of its energy demand. It has led […]

Mexico Gasoline Prices to Surge by the Most in Two Decades

28 Dec 2016   Mexico

Mexico will raise gasoline prices by as much as 20 percent in January, stoking inflation that’s already running at the fastest pace in almost two years. A month after the increase is implemented, prices will start to adjust on a daily basis as the government loosens its control of the gasoline market, the Finance Ministry said in an e-mailed statement Tuesday. January’s increase in unleaded gas will be the biggest since November 1998. The jump in prices risks pushing up inflation at a time when a slump in the peso has already fueled concern about rising consumer prices and led the central bank to raise interest rates five times this year. It is a risk Mexico is willing to take as the government gradually lifts controls over gasoline prices to open the fuel market to private development, a move made possible by a landmark energy overhaul in 2013. “This […]

U.S. Natural Gas Needs Mexico

23 Dec 2016   Mexico, USA

The United States became a net exporter of natural gas in November 2016, a development driven by falling imports (due to high domestic natural gas production) and rapidly increasing natural gas exports. The two main drivers of U.S. natural gas exports are the Mexican natural gas pipeline and the LNG export terminal at Sabine Pass, operated by Cheniere Energy through Cheniere Energy Partners. If conditions remain the same, and foreign demand for natural gas continues to increase, the U.S. has the potential to become a major energy exporter. That is, of course, if politics doesn’t get in the way. As of September 2016, total U.S. natural gas pipeline exports reached 185 billion cubic feet (BCF), an increase of 33 percent from last year. Exports to Mexico were way, way up this year, exceeding 123 BCF and rising 79 percent from last year. Canada, the other major market for U.S. […]

U.S. refiners cash in on Mexico’s record fuel imports

22 Dec 2016   Mexico, USA

U.S. Gulf Coast refiners are cashing in on rising fuel demand from Mexico, shipping record volumes to a southern neighbor that has failed to expand its refining network to supply a fast-growing economy. The fuel trade could top a million barrels per day (bpd) at times in 2017 as Mexico becomes increasingly dependent on the United States for strategic energy supplies and providing business worth more than $15 billion a year to refiners such as Valero, Marathon Petroleum and Citgo Petroleum. The rise in Mexico’s fuel imports reflects an economy that, after expanding for 27 quarters in a row even amid a public austerity plan, has been unable to increase its refining output to satisfy the consistent growth of its energy demand. It has led to rapid reversal in energy trade […]

Mexico Eyes Higher Oil Output Than Venezuela, Brazil

8 Dec 2016   Mexico

Mexico plans to increase its crude oil production substantially, overtaking both Venezuela and Brazil if its plans work out. This has emerged after earlier this week, the country awarded nine major drilling contracts to international bidders for fields in the Gulf of Mexico. Venezuela currently produces around 2 million bpd , which could drop to 1.6 million bpd next year. Brazil pumped 2.6 million bpd in October. When commercial production starts at the nine new fields, Mexico’s National Hydrocarbons Commission expects the combined output from them to reach 900,000 bpd, adding to the country’s current rate of some 2 million bpd. One of the fields that will be developed in the deepwater section of the Mexican shelf, part of the Trion block, was awarded to Australia’s BHP Billiton, one of the world’s top three miners, which has been expanding its oil and gas operations recently. This, […]

Australia’s BHP Billiton Wins Bidding for Stake in Mexico’s Trion Oil Field

6 Dec 2016   Australia, Mexico

Australia’s BHP Billiton won bidding Monday to partner with Mexican state oil company Petróleos Mexicanos in the Trion deep-water oil field in the Gulf of Mexico in an auction in which 10 other deep-water blocks are also being offered. Billiton outbid BP PLC to become Pemex’s first private partner in exploration and production under Mexico’s 2013 opening of the oil industry. Bids for 10 other deep-water blocks up for auction are due to be opened later Monday. For Trion, both Billiton and BP offered additional royalties of 4%, while Billiton offered an additional cash commitment of $624 million compared with $606 million offered by BP. Billiton will have 60% of the project and Pemex 40%. The auction is the fourth under the 2013 opening of the Mexican oil industry, but the first for deep-water reserves and the first to attract the interest of major oil companies. The Trion […]

China Offshore Oil wins two Mexico Perdido blocks in deep water auction

6 Dec 2016   China, Mexico

Mexico awarded China Offshore Oil Corporation the fourth block tendered from the Gulf of Mexico’s Perdido Fold Belt off the U.S.-Mexico maritime border in a historic deep water oil and gas auction on Monday. Block 4 is a 725 square mile (1,876.7 square km) area which the energy ministry says contains some 540.5 million barrels of oil equivalent (boe) in light and extra light crude. Earlier, China Offshore Oil also won the first block auctioned in the Perdido Fold Belt. (Writing by Dave Graham)

Oil majors line up to bid for Mexican deepwater contracts

5 Dec 2016   Mexico

Some of the world’s best-known oil majors are expected to compete in a long-awaited auction for deepwater contracts in Mexico on Monday that marks a key opening of the country’s energy sector. ExxonMobil, BP, Royal Dutch Shell and Chevron and China’s Cnooc are set to be among bidders for blocks in the Gulf of Mexico that have been off-limits to private investment for nearly eight decades.  ”It is the start of the big oil game” in Mexico, said Pablo Medina, analyst at Wood Mackenzie, an energy consultancy.  The auctions will be the first big test of investment appetite in Mexico since Donald Trump romped to victory in the US election with populist pledges including renegotiating the North American Free Trade Agreement.  His Nafta pledge could, if realised, bump up exploration costs in Mexico if imports of heavy equipment needed for drilling were subjected to tariffs

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Mexican Oil Auction Offers First Major Test of Foreign Firms’ Interest

3 Dec 2016   Mexico

Mexico is preparing to auction rights to drill in the oil-rich deep waters of the Gulf of Mexico, considered the crown jewel of the country’s energy industry, which only opened to foreign investment three years ago. Monday’s auction is seen as the first major test of Mexico’s ability to work with the world’s biggest players. At a time when low oil prices are limiting production elsewhere, the deep-water blocks have caught the attention of energy giants Exxon Mobil Corp., Chevron Corp. and BP PLC, and state-owned firms Statoil ASA of Norway and Petróleo Brasileiro SA of Brazil, among others. The country’s oil regulator hopes to award up to 10 unexplored deep-water blocks and find an operating partner to take a 60% stake in the Trion oil field, located offshore just south of the […]

As Mexico Welcomes Oil Giants, Its Colossus Slowly Erodes

2 Dec 2016   Mexico

In Mexico, the era of big oil is just getting started. But for the state oil dinosaur, its best days appear to be behind it. The reign of Petroleos Mexicanos, the government-owned oil producer known as Pemex, is slowly being dismantled after a 2013 overhaul ended its monopoly and opened up the industry to foreign rivals for the first time in more than seven decades. A Dec. 5 auction in which oil majors including Exxon Mobil Corp., Chevron Corp. and BP Plc may bid on deepwater blocks marks the most significant step yet in Mexico’s effort to reclaim its spot as a global crude-producing powerhouse. Mexico needs the auction to be a hit. Out of the gate, the industry overhaul suffered a major blow when the country’s oil prices collapsed from above $100 a barrel in 2014 to as low as $19 a barrel in January. The drop stymied […]

Exxon, Chevron Set to Bid in Mexico’s Deepwater Oil Auctions

29 Nov 2016   Mexico

Chevron Corp. has joined forces with Petroleos Mexicanos and Japan’s Inpex Corp. to bid next week for the right to explore for oil and natural gas, the first time the state-owned operator will partner with private companies to develop crude in the Gulf of Mexico. Seven groups and eight individual bidders have been qualified to participate in the Dec. 5 auctions that include the Trion field joint-venture with Pemex and other 10 deepwater blocks, Mexico’s National Hydrocarbons Commission announced in Mexico City on Monday. The regulator didn’t specify which bids were for the joint venture or for the other areas. Total SA has joined forces with BP Plc and Norway’s Statoil in one group, and with Exxon Mobil Corp. in another. Eni SpA and Lukoil have also joined up, and Anadarko Petroleum Corp. and Royal Dutch Shell Plc formed another group. The Mexican government made a series of adjustments […]

Can Oil Help Mexico Withstand Trump’s Attack on Trade? It’s Hard to See How

28 Nov 2016   Mexico

The town that oil built is emptying out. “For Sale” signs are plastered on concrete-block houses and sun-bleached bungalows alike. The idled oil workers who used to cluster in the main square, hoping to pick up odd jobs, have moved on. Here in Ciudad del Carmen, on the gulf coast of Mexico , even the ironclad union positions are slipping away. Some roughnecks on the offshore rigs of the national oil company, Pemex, have not worked in months, and their voices are filled with anxiety. “What do you think is going to happen?” some ask. Pemex has been limping along for years , bleeding billions of dollars annually, saddled with debt and struggling to maintain production as its giant oil fields in the Gulf of Mexico run dry. Next year, it will pump less than two million barrels a day, the lowest output since […]

Why Mexico’s Oil Reform Is A Huge Opportunity For Investors

22 Nov 2016   Mexico

When a massive country de-nationalizes its entire energy sector and opens its oil and gas doors for the first time ever to foreign companies, the opportunities are staggering. Welcome to the ‘new’ Mexico, and welcome to the early stages of an oil and gas game that will be bigger—from an investor’s perspective—than anything in history. Mexico’s move to implement historic energy reform legislation in December 2013, and follow-up legislation in 2014 that further solidified the comprehensive de-nationalization, provides an unprecedented opportunity for oil companies looking to tap into Mexico’s huge energy potential. Mexico has ended the now 75-year monopoly of state-owned Petroleos Mexicanos (Pemex), and admitted in no uncertain terms that it needs foreign partners and investors. All of this has prompted the US Energy Information Administration (EIA) to revise its 2040 forecast for Mexican oil and gas production upwards by a whopping 76 percent. All of this, says […]

Trump Trade Stance With Mexico Could Press Gas Prices

15 Nov 2016   Mexico

Donald Trump’s presidency is widely viewed as a boon for the U.S. energy industry, but some of his planned policies could pose problems for the natural-gas business. Mr. Trump has won plaudits from energy executives for saying he would peel back government regulations on oil companies, oppose global efforts to curb climate change and review a recent agreement that lifted sanctions on Iran, a major oil exporter. Yet some of his other proposals could be detrimental to natural gas. He has pledged to tear up trade pacts and wall off Mexico, which could hurt the flow of U.S. natural gas to its southern neighbor. Mexico has become an increasingly important outlet for the fuel that has helped buoy domestic prices amid a glut of shale gas, analysts say. “Mexico has been one of the […]

Wall Or No Wall: Trump Needs The Mexican Oil Industry

15 Nov 2016   Mexico

Hydrocarbon storage Two of Donald Trump’s main pledges during the presidential race were building a wall along the border with Mexico, and making the U.S. energy-independent. Now that the election is over, these issues are coming to the fore. First, the president-elect said that the wall , which he mentioned on the campaign trail and in numerous debates, is still very much on the table, though what type of “wall” that may be is an unknow. Second, he said he planned to start deporting illegal aliens—those with criminal records—which could amount to as many as three million individuals. Despite “The Wall”, the deportation of Mexican citizens, and several grandiose comments about Mexico paying for said wall—not to mention Trump’s proclamation that he would raise import tariffs up to 35 percent on some Mexican products—Mexico’s President Enrique Pena Nieto was among the first of the world leaders to congratulate Trump […]

Mexico Seeks to Export Flagship Maya Crude to U.S. West Coast

13 Oct 2016   Mexico

Cargoes would be first in eight years amid Asian competition California refineries mainly buy from Saudi Arabia, Canada Mexico is targeting U.S. West Coast refineries to boost sales of its flagship Maya crude amid a global oil glut. While Mexico has been a regular supplier of Maya oil to U.S. Gulf Coast refineries, it hasn’t shipped any to the West Coast since February 2008, according to data from the U.S. Energy Information Administration. California refineries such as Valero Energy Corp.’s Benicia, Chevron Corp.’s El Segundo and Phillips 66 used to be big buyers of the grade. Petroleos Mexicanos, the state-controlled oil producer, took the first step in making Maya exports to the West Coast a reality Tuesday by issuing an official price for November sales. Earlier in the day, Pemex said on its official Twitter account that it was planning to resume shipments to the region. “With stronger margins […]

Mexico unveils new oil finds

15 Sep 2016   Mexico

New discoveries made off the eastern coast of Mexico have the potential to produce more than 20,000 barrels of oil per day, the state energy company said. Mexican state oil company Petróleos Mexicanos said it made two oil discoveries in the deep waters of its territory of the Gulf of Mexico and four in the shallow waters, which could combine for a potential production rate of around 22,000 barrels of oil per day. All told, the discoveries contain, at the high end , an estimated 200 million barrels of oil equivalent. Mexican President Enrique Peña Nieto’s is moving to draw private investors to the state energy sector after more than 70 years of a monopoly […]

Pemex Budget Slashing to Continue as Minister Signals Austerity

9 Sep 2016   Mexico

Finance Minister sees possible cut around 100 billion pesos Pemex budget cuts continue to exacerbate oil production losses Mexico will continue to hack into the budget of its oil producer next year, a move likely to mean further financial duress and continued output declines for Petroleos Mexicanos. It’s “reasonable” that the 2017 budget reduction for Pemex, as the state-owned company is known, will be around the same amount as the 100 billion pesos ($5.4 billion) cut this year, Jose Antonio Meade, the country’s newly appointed Finance Minister, said in an interview with Radio Formula. “It is natural that the adjustment is maintained, given the fall in international oil prices,” Meade said, when asked if the government could repeat a similar reduction. “It is a reasonable deduction and in-line with what other oil companies in the world are doing given the complicated environment.” Further subtraction by the Mexican government of […]

These Oil Majors Will Bid In Mexico’s $44B Offshore Tender

20 Aug 2016   Mexico, Offshore

U.S. oil majors ExxonMobil, Chevron and Hess will bid jointly in the upcoming deepwater oil and gas tender planned by Mexico. The auction, which will take place on December 5, will involve ten deepwater blocks in the Gulf of Mexico. The tender, which is the first one focused on deepwater deposits, is expected to generate US$44 billion in proceeds. According to a source close to the three companies, they have already signed a Joint Operation Agreement for the bidding process, which means they have already selected the operators for the fields they will operate should they be awarded licenses. Mexico only allowed foreign oil companies to explore and exploit its crude reserves two years ago, forced by an 11-year decline in production. This tender now is in an area that contains what’s estimated to be 76 percent of Mexico’s prospective crude reserves. The local state-owned energy company Pemex, however, […]