Green Tech Media – Despite Mexico opening up its electric-power sector to private players, unclear rules are holding back installers and investors from tapping much of the country’s solar power potential.
By Laurence Iliff / Wall Street Journal
Mexico’s hydrocarbons regulator has improved the terms for its September oil auction to drum up more interest among cash-strapped international oil firms reeling from falling prices, with industry analysts applauding the move Wednesday as a step in the right direction.
The National Hydrocarbons Commission approved a series of changes in both auction procedures and contract terms that reduce the risk to oil companies seeking to begin operations in Mexico following the nation’s energy opening to private and foreign firms.
The first oil block auction under the energy overhaul, held in July, was considered a failure because only two of 14 exploratory offshore blocks were awarded. Mexican officials promised to find ways to improve the terms for the second auction, which are for five groups of already discovered offshore fields.
Among the 14 companies that have qualified to bid in the next auction are major oil companies like Chevron Corp. and Royal Dutch Shell, national oil firms such as China’s Cnooc Limited, and Mexican upstarts Sierra Oil & Gas and Carso Oil & Gas.
Bloomberg – When oil collapsed to a six-year low this month, weak demand from China and extra barrels from Iran and Saudi Arabia were marked as the prime suspects. Another country, less central to global energy markets, had a big part to play: Mexico.
El Economista – Mexican crude oil fell 6.98 percent on Monday to $33.71 a barrel, its lowest level since Feb. 18, 2009. The decline on Monday was the eighth round of losses.
Notimex.- A barrel of Brent North Sea for delivery in October traded at $44.23 at the beginning of the session Monday, losing 84 cents (1.86 percent) compared to its previous close of $45.07 a barrel. Meanwhile, US crude West Texas Intermediate fell $1.15 dollars (2.84 percent) and was quoted at $39.30 per barrel.
Desmog – Records obtained by DeSmog shed further light on the role the U.S. government has played to help implement the privatization of Mexico’s oil and gas industry. They reveal the U.S. government acting as a mediator between Mexico’s government and U.S. oil and gas companies seeking to cash in on a policy made possible by the behind-the-scenes efforts of then-Secretary of State Hillary Clinton’s U.S. State Department.
Sentido Comun – Mexican and U.S. officials started operations of the first wind farm to supply electricity to both sides of the border. The farm at the Rumorosa in Baja California cost $300 million.
El Finaciero – The signing of contracts with the winners of the first bidding in Round One will be extended to Sept. 4 rather than Aug.21 due to an excessive workload on the Commission Nacional de Hidrocarburos (CNH) and compliance with certain formalities.
Sentido Comun – The Federal Electricity Commission said it plans to reduce by 90 percent the use of fuel oil to generate electricity from the 2012 level as part of its strategy to replace expensive and polluting fuels with those that are cheaper and more environmentally friendly, such as natural gas.
By Timothy Gardner / Reuters
The Obama administration will allow limited sales of U.S. crude to Mexico for the first time, a senior administration official told Reuters, marking another milestone in loosening a contentious ban on exporting domestic oil.
The Commerce Department is “acting favorably on a number of applications” to export U.S. crude in exchange for imported Mexican oil, the official said. Such oil swaps are one of several possible exemptions allowed in the four-decade-old law that otherwise bans most overseas shipments.
The approvals come eight months after Mexico formally sought permission for a swap, a historic step for a nation where oil self-sufficiency has long been a source of pride.
The shipments, likely to be lighter, high-quality shale oil, will help Mexico’s aging refineries produce more premium fuels. U.S. refiners will continue to get Mexican heavy oil, a better match for them than the deluge of light oil coming from Texas and North Dakota.
The licenses, good for one year, will be formally issued by the end of August, the official said. He declined to offer further details on volumes, saying only that the number of approvals was “a handful.”
Counterpunch – Emails released by the U.S. State Department reveal more about Hilary Clinton’s role in the origins of energy reform efforts in Mexico. Two of her staffers who worked to make it happen stand to gain financially from the energy reforms.
CNBC – A number of factors influenced Mexico’s slow but steady rise as a manufacturing hub for multinational corporations, including NAFTA, other trade agreements, cheap labor costs and proximity to the United States. But observers point to another recent development that they see accelerating investment in Mexico and boosting economic productivity: Electricity is getting cheaper.
Reuters – A new partnership between U.S.-based power company AES Corp. and Mexico’s Grupo Bal launched on Monday will invest up to $2.5 billion over the next five years mostly in Mexico’s newly opened power sector.
El Economista – Although the tender will be held in December, there are 23 companies in the process, reflecting greater interest in these contracts. The tender will take place in December. Of the interested firms, 74 percent are domestic. The remainder are Canadian, Chinese, Chilean, Argentine, French and American.
By Laurence Iliff / Wall Street Journal
Mexico’s oil regulator on Tuesday modified terms for a September auction of oil fields after a poor outcome at last month’s tender of 14 offshore blocks.
One change allows a company to bid individually for one group of fields and in consortium for a different group of fields, which was prohibited previously. A company can’t bid both alone and as a group for the same fields.
The commission also adjusted the financial guarantees that must be posted by winning bidders. Rather than having a set rate of $6 billion in equity as a financial guarantee for the contract, a winning bidder can alternatively provide a guarantee equaling 18 times the government-set minimum investment for work on the fields.
That change would allow a firm or consortium holding a small number of fields to post less than the $6 billion in equity required, and is designed to attract smaller firms to the auction. The commission also added a requirement that bid winners take out at least $1 billion in insurance against oil spills or other accidents.
El Universal – Mining, infrastructure and transport giant Grupo Mexico is looking for partners for the second oil extraction tender, which will auction off nine fields in shallow waters of the Gulf of Mexico.
Bloomberg – Mexico began its annual program to lock in oil sales for the coming year as a shield against a further drop in prices, three people with direct knowledge said.
By David Alire Garcia / Reuters
Mexico, which has started to open its nationalized oil industry to additional private investment, will postpone auctions for deep-water oil exploration and production contracts and adjust the terms of upcoming tenders after an inaugural oil auction failed to meet the government’s modest expectations.
Energy Minister Pedro Joaquin Coldwell told local television the government will change rules that scared off potential bidders earlier this month, when it was able to auction only two of 14 blocks in a pivotal oil and gas tender.
He signaled that the government will relax its requirement that consortia bidding on oil parcels must have one member act as a guarantor and hold shareholder equity of at least $6 billion to protect the state’s interest in the event of a major accident.
“We are revising the issue of the guarantees,” said Joaquin Coldwell in a Tuesday night interview with top Mexican broadcaster Televisa’s cable news channel Foro TV.
He also said the government would tweak rules prohibiting a consortium from selecting a new company to replace a pre-selected operator that pulls out. He said that rule thwarted bids in this month’s auction.
He said the government will also allow companies to make a second bid in auctions if an initial bid fails to meet a government set minimum.
Sentido Comun – State oil company Petroleos Mexicanos will supply six million barrels of oil to Isthmus Japanese refiner JX Nippon Oil & Energy in six shipments between August and January 2016.
CNBC – Mexico made headlines and earned praise from environmentalists this year when it pledged to cap and cut carbon emissions. Less discussed has been how Mexico may use U.S. natural gas to help it get there.