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.
Offshore – 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. According to a Bloomberg report, 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 ten other deepwater blocks.
Utility Dive – The California ISO announced this week that Mexico’s grid operator is considering linking Baja California Norte with the state’s growing western Energy Imbalance Market, as the voluntary power market continues to grow and show benefits.
WSJ – Mexican state oil company Petróleos Mexicanos said it will seek private partners to develop two shallow water oil fields in its second planned exploration and production joint-venture under the country’s new energy laws.
Reuters – Mexico’s oil regulator again approved a more flexible bidding scheme for a highly anticipated upcoming auction that will pick a partner for national oil company Pemex to jointly develop its deep-water Trion block in the Gulf of Mexico.
Bloomberg – 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.
Mexico’s oil regulator on Monday gave oil companies an extra week to submit comments and questions about the country’s first-ever deep water joint venture covering state oil company Pemex’s Trion field.
Potential bidders will now be able to submit comments through Oct. 10, the regulator, known as the CNH, said.
The CNH also approved a week-long extension on the final publication of clarifications to the joint operating agreement between Pemex and its future partner to Oct. 14.
The regulator left unchanged the Dec. 5 date on which bids from pre-qualifed companies or consortia will be unveiled and a winner announced.
“This is an additional space for participants to study, analyze and comment on this new version of the joint operating agreement,” said CNH President Juan Carlos Zepeda.
PV Tech – The final results are in for Mexico’s second long-term renewable power auction, since the country’s energy sector was liberalised following reforms that allowed for private participation. A total of 23 winners out of a pool of 57 eligible bidders were selected by CENACE and have won long-term energy contracts and clean energy certificates (CEL) and will build renewable projects worth US$4 billion for 2,871MW of new capacity.
Clean Technica – The preliminary results of the much-awaited second renewable energy auction for Mexico were declared last week. Solar dominated, with more than half of the total amount of energy awarded to solar PV projects.
WSJ – Mexico’s opening of its electricity market after decades of state control is driving fierce competition among suppliers of clean energy and pushing prices down, as renewable energies gain traction across Latin America.
Mexico’s government, following the launch this year of a wholesale electricity market under an independent system operator, this year held its first auctions in which companies made bids to sell renewable energy under long-term contracts to state-owned utility Comisión Federal de Electricidad, or CFE, starting in 2018.
On Wednesday, purchase contracts were awarded for 8.9 million megawatt hours a year of electricity from mostly solar and wind generating plants—equivalent to about 3% of Mexico’s current electricity use.
OilPrice – Mexico’s energy secretary said last week at Rice University that the government could begin shale auctions at some point after March 2017, another step forward in the country’s historic opening up of its energy sector. Mexico is sitting on what many think are vast shale oil and gas resources in the north, which are thought to be extensions of the Eagle Ford shale in South Texas.
Reuters – Royal Dutch Shell participated in Mexico’s oil hedging program for 2017, the first time an oil company has taken part in the world’s large commodities hedging program.
Financial Times – Mexico has spent more than $1 billion to lock in prices for oil exports next year to help protect public finances as its underperforming economy faces intensifying international headwinds, including the timing of a US rate rise and the US elections. The government’s annual hedging program seals in a price of $42 a barrel for 2017.
WSJ – Mexican oil regulators on Tuesday approved a bidding process for a dozen exploration and production areas containing mostly natural gas, the sixth auction since the country opened the industry to private and foreign investment. The auction includes 12 onshore blocks, nine in the Burgos basin of northern Mexico and three in the south of the country.
NYT – Eight years after Mexico embraced the fight against climate change, setting off a wind rush in Oaxaca’s Isthmus of Tehuantepec, people in poor, indigenous communities are divided over the benefits of the green revolution.
Platts – Enrique Peña Nieto is scrambling to save the legacy of his much-lauded reform of Mexico’s oil industry as the doors of Mexico’s political cycle close on the president amid electoral defeats, political violence and a tough global environment for the oil industry. Meanwhile, Pemex chief Jose Antonio Gonzalez Anaya seeks to defend the formerly invulnerable castle of the state oil company from what some fear could be imminent collapse.
The Hill – The United States and Mexico are set to begin negotiating a new nuclear power cooperation agreement. The deal would allow American nuclear companies to export their products and technologies to Mexico.