EFE – Mexico’s government confirmed that its historic oil opening will take place on July 15, when an initial batch of 14 shallow-water exploration and production blocks in the Gulf of Mexico will be awarded in the first phase of its Round One auction.
AP – Mexico’s state oil company says it is working to resupply gas stations in several states after days of shortages caused by an increase in fuel thefts from pipelines. The shortages affect major urban areas including Guadalajara, Monterrey and Saltillo.
Splash24/7 – Schlumberger has entered into a three-party memorandum of understanding with Spectrum and PGS for cooperation in exploration in Mexico and Mexican waters.
By Adam Williams, Andrea Navarro and Pablo Rosendo Gonzalez / Bloomberg
Some would-be bidders in Mexico’s first oil license auction are resisting guarantee requirements in an impasse that threatens to reduce competition in the country’s energy liberalization, people briefed on the matter said.
Rules require each bidding group to have one partner to act as guarantor, and for that company to maintain shareholder equity, or total assets minus liabilities, of at least $6 billion.
The stipulation of a single guarantor, rather than sharing the burden among partners, is proving prohibitive for some companies, three people said, asking not to be identified because the matter is private.
A consortium consisting of Australia-based Woodside Petroleum, Mexico’s Grupo Diavaz and Argentina’s Pluspetrol is among registered bidders reluctant to proceed, the people said. Spokesmen for all three declined to comment.
Mexico is hoping for $17 billion in private investment in the first of five oil auctions this year as it seeks to turn around a decade-long production slump at state monopoly Petroleos Mexicanos. Nineteen individual companies, including Chevron Corp. and Exxon Mobil Corp., and seven consortia qualified to bid for 14 shallow-water blocks this month.
EFE – Spain’s Iberdrola and the Mexican Federal Electricity Commission signed an agreement to develop electricity and natural gas projects in Mexico under the energy industry overhaul. The agreement is based on “an accord signed a year ago by the two companies that called for investment of around $5 billion by Iberdrola until 2018.
Yucatan Times – Wind energy in Mexico is expected to attract an annual investment of $2 billion during the next 25 years, becoming the most important sector in the country’s energy industry and the main source of large-scale renewable energy by 2033, surpassing hydroelectric.
UPI – Federal agencies in Mexico said they’re conducting aerial surveillance of a fire that occurred on the Akal-H platform in the southern Gulf of Mexico. No injuries were reported and the oil company said fire boats deployed to the platform extinguished the fire “immediately.”
By Anthony Harrup / Wall Street Journal
Mexico’s state-owned electricity utility Comisión Federal de Electricidad unveiled plans Monday to tender projects for close to $10 billion, including an 800-kilometer submarine pipeline to carry natural gas from southern Texas to the Mexican Gulf Coast.
The 24 projects include five natural gas pipelines, three small pipeline branches, four power generation stations and a series of electricity transmission and distribution projects.
The projects, most of which are scheduled to start operating in 2017 and 2018, will add around 2,300 kilometers to the country’s gas pipeline network, 1,442 megawatts of electricity generating capacity, and more than 3,000 kilometers in transmission and distribution lines, CFE Chief Executive Enrique Ochoa said at an event.
By Andy Tully / Oil Price
The Mexican state-owned oil company Petroleos Mexicanos, or Pemex, says it has discovered one of the most copious group of oil fields in the shallow waters of the Gulf of Mexico, its largest such discovery in five years.
The five fields, situated off the states of Campeche and Tabasco, have total proven, probable, and possible reserves that may be as high as 350 million barrels of crude oil equivalent and could produce as much as 200,000 barrels a day, Pemex CEO Emilio Lozoya told an energy conference in Guadalajara on Wednesday.
He called the find an “achievement … of great magnitude.”
Pemex said the recent finds were the company’s biggest since it discovered the huge Atatsil and Tsimin-Xux oil fields, which were discovered in 2008 and 2010, respectively.
On July 15, Mexico plans its first auction of leases for 14 shallow-water exploration blocks in the same area of the southern Gulf, an event that is expected to open a floodgate of private investment in the country’s energy sector.
“The certain prospect of 200,000 extra barrels of production is very good news for Pemex, for the industry and for our country,” Lozoya told the meeting in Guadalajara.
Investor’s Business Daily – Sending light shale crude from the U.S. to Mexico in exchange for Mexico’s heavier crude is “under active consideration” by Washington, said Energy Secretary Ernest Moniz. “With Mexico’s energy reform, a lot of things are different.”
By Isabella Cota, Eric Martin and Carlos M Rodriguez / Bloomberg
Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among seven banks that made oil trades with Mexico that allowed the government to lock in higher prices as crude tumbled 49 percent last year.
The banks, which also include Citigroup Inc., Morgan Stanley, BNP Paribas, Barclays and HSBC Holdings, were the counterparties on oil trades the Mexican government made in 2014 to hedge prices for the coming year, the Bank of Mexico said in response to a public-information request by Bloomberg.
The government, which depends on oil for about a third of total revenue, had previously said it paid $773 million for the hedges through 43 operations in international derivatives markets.
So far, the bet is paying off: Mexico’s Maya crude-oil mix has averaged $49.42 since the end of November — well below the price of $76.40 a barrel guaranteed under the hedges. The seven banks would be on the hook to make up the price difference, according to the government.
With 228 million barrels of oil sales covered, the government’s hedges are currently worth about $6.45 billion, based on Maya prices observed since the beginning of December, and assuming that oil stays at its current level through November.
WSJ – Mexico’s national oil company Petróleos Mexicanos has discovered significant oil fields in the shallow waters of the Gulf of Mexico and expects a fairly quick ramp up to an estimated 200,000 barrels of crude oil a day, Chief Executive Emilio Lozoya announced Wednesday.
Reuters – The minimum percentage of profits that companies must bid to win contracts on 14 oil and gas blocks offshore Mexico being auctioned this summer will be revealed only on the day the tenders are awarded, the Finance Ministry said on Tuesday.
Reuters – Organizacion Soriana, Mexico’s second-largest supermarket chain, said it would build two $130 million wind farms with Mexican renewable energy group Gemex in Tamaulipas state to provide energy exclusively for its stores.
Bloomberg – Mexico’s two largest petrochemical companies, among the hardest hit by a global plunge in oil prices, are now top performers as crude’s rebound helps them take advantage of a landmark energy industry opening.
Bloomberg – Mexico opening its oil industry for the first time in more than seven decades is creating competition for Brazil’s auction later this year, said two top officials at the country’s oil regulator.
Street Insider – Abengoa has been selected by Mexico’s Federal Electricity Commission (CFE) to construct four new substations in the state of Sinaloa. The project is expected to be completed within 16 months.
Yucatan Times – Russia’s deputy minister of energy, Anton Inyutsu, said government intends to boost cooperation with Mexico’s energy sector and warned that sustainable development is a priority these days.
Bloomberg – Vestas Wind Systems, the world’s largest turbine maker, agreed to supply equipment with 99 megawatts of capacity for a pair of projects in Mexico. Terms weren’t disclosed.
Nola – Chevron and Exxon Mobil are among 19 companies Mexico has approved to drill for oil and gas off its coast, opening that country’s shallow waters to private companies for the first time in more than 75 years.