Bloomberg – Mexico plans “without a doubt” to protect the country against low crude prices for next year, Deputy Finance Minister Vanessa Rubio said, in a continuation of what’s become the world’s largest commodities hedging program. The amount of Mexico’s export basket to be protected through market operations, versus through its stabilization fund, has yet to be determined,
Renewables Now – The Mexican renewables unit of Enel has started construction of a 200-MW wind farm in Coahuila, the Italian energy group announced. The Amistad plant will require a total investment of about $300 million.
Financial Times – Italian oil company Eni has discovered “meaningful” reserves of oil off the coast of Mexico after drilling the first well by an international oil company since Mexico opened up its long closed oil sector to private investment under a 2013 reform. “Reserves are still being assessed, but the well indicates a meaningful upside to the original estimates,” Eni said in a statement.
Oil Price – Four years after Mexico’s energy reforms began, Lopez Obrador, who currently polls in first place to be elected for Mexico’s top public office in 2018, is threatening to derail the liberalization and review any contracts that have been signed since the entire process began.
LAT – Many analysts agree that in at least one sector — energy — the two countries still share opportunities for financial gain and have less incentive for conflict. Even if some terms of the North American Free Trade Agreement change, they say, energy can remain a boon for both countries’ economies, along with that of Canada.
PV Tech – Mexico will add 5GW of new clean energy to existing capacity, representing 170% growth in generation for wind and solar over the last 18 years, secretary of Energy Pedro Joaquín Coldwell has said.
PV – Contracts have been signed for 1.8 GW of solar in Mexico, including one contract at a price of $26.99/MW by Fotowatio. The median price for solar in this auction was around $31.70/MW.
Oil Price – Should US-Mexican trade be re-negotiated or a replacement to NAFTA, the 1994 trade agreement, be put into place, it’s unlikely to affect the growing cross-border energy trade.
Reuters – 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.
Reuters – Mexican gasoline prices will rise by as much as 20.1 percent in January compared to the highest recorded prices in December, the government said, as part of a program to end years of government-set prices at the pump.
Offshore Magazine – Mexico will delay until June 19, 2017, the announcement of winners for the next phase of its oil and gas, the so-called Round Two tender, which includes 15 shallow-water areas in the Gulf of Mexico. The delay is designed to allow more companies to take part and to incorporate modifications suggested by industry.
WSJ – Mexico is moving to end eight decades of government-controlled gasoline prices, a step that will lead to a big jump in prices at the pump and could prompt a backlash against the government’s efforts to liberalize the country’s energy market. Price controls for gasoline will be scrapped in late March in parts of the country that border the U.S., where motorists are more accustomed to competition among gasoline stations, regulators said.
Reuters – 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.
Financial Times – China has muscled its way into investment in Mexico by grabbing two deepwater oil blocks as part of an auction considered the jewel in the crown of the country’s energy reform, in a move that boosts the two nations’ sometimes testy economic ties.
NYT – Mexico’s Energy Ministry began auctioning off the crown jewels of its oil reserves, deepwater tracts that, along with those for fracking, are supposed to set off an oil-and-gas rush south of the border. The auctions are a result of a 2013 law that opened the country’s oil and gas industry to private companies, after 75 years of public ownership. What could go wrong?
Plenty, as recent experiences in the United States suggest.
Oil Price – 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.
Reuters – Mexico has received $2.65 billion from its oil hedging program, the country’s Finance Ministry said on Wednesday, in what is considered to be the world’s biggest sovereign derivatives trade.
Pays Org – Three major issues with Mexico’s weak rule of law threaten to foil the successful implementation of the new reforms made possible when Mexico opened its energy sector to private and foreign investment in 2013, according to a new paper from the Mexico Center at Rice University’s Baker Institute for Public Policy.
By Juan Montes and Robbie Whelan / Wall Street Journal
Buoyed by the results of Mexico’s first deep-water oil auction, widely seen as a big success, President Enrique Peña Nieto’s government plans to raise the bet.
Mexico intends to hold a second, much bigger deep-water auction around October next year, while state firm Petróleos Mexicanos will likely seek as many as 25 partnerships with private firms over the next two years, Energy Minister Pedro Joaquín Coldwell said in an interview.
“We’re going to be more ambitious, we’ll take a step forward because we now have more experience,” said Coldwell. “What we’ll very likely see are auctions with many more oil blocks than what we have seen so far.”
Mexico awarded eight out of 10 deep-water oil blocks in the Gulf of Mexico on Monday, exceeding expectations and attracting such oil majors as Exxon Mobil Corp. and the China National Offshore Oil Corp., despite a difficult backdrop of low oil prices and steep cuts in oil investments.
In a separate auction, Australia’s BHP Billiton won rights to partner with Pemex to develop the Trion field near the Mexico-U.S. maritime border—the first time Mexico’s state-oil firm partners with a private company to share risks and profits.
The results “encourage us to be much more ambitious in the coming auctions,” Coldwell said. “The menu [of blocks] is going to widen considerably.”
Reuters – Mexican Finance Minister Jose Antonio Meade said on Wednesday that any crude production cut by OPEC would be positive for Mexico’s finances and the health of state oil company Pemex after an agreement by producers to curb output.