Tag Archives: Mexico shale

BBVA Compass chief economist testifies at Texas Senate on impact of Mexican energy reforms on state – MarketWatch

He says reforms to bring state 217,000 jobs, $45 billion in economic activity-Research finds border ‘could see one of the most dramatic transformations in its history’-Groundbreaking legislation in the spotlight

HOUSTON, Sept. 22, 2014 /PRNewswire/ — BBVA Compass’ Chief Economist Nathaniel Karptestified at a TexasSenate subcommittee Friday about Mexico’s historic energy reforms, which he said will add more than 200,000 jobs, almost $3.5 billion in state revenues and $45 billion in GDP to the Texas economy.

Karp was invited to speak before the natural resources subcommittee by Texas Sen. Juan Hinojosa of McAllen, the committee’s chairman. He spoke about research his team at BBVA Compass conducted on the economic impact that Mexico’s groundbreaking legislation, which was passed in December and allows private firms to invest in the country’s energy sector, will have on Texas.

“Texas stands to be the major beneficiary from the reform due to deep economic ties, geographic proximity and expertise in energy exploration, production and distribution,” Karp told the subcommittee. Mexico “will need Texas’ firms to provide physical resources, cutting-edge technologies, human capital and expertise” – particularly in deepwater and horizontal drilling and extra heavy oil.

He anticipates a large share of the foreign direct investment to Mexico will be used to purchase goods and services from Texas, benefiting a wide range of the state’s industries. In addition, he predicted that Mexico’s faster economic growth created by the reforms will further boost trade with Texas and business opportunities throughout the state.

He pointed out that of the five promising basins in Mexico, the two largest are on or near the Texas border. The Burgos Basin in northeast Mexico is estimated to hold two-thirds of Mexico’s shale gas resources. It’s an extension of Texas’ Eagle Ford Shale, and would have significant appeal for companies that operate on the Texas side of the border. Karp said this will help narrow the socioeconomic disparities between Texas’ border cities and big metro areas, like Houston and Dallas.

“If these border towns effectively seize the opportunity, the Texas-Mexico border could see one of the most dramatic transformations in its history,” Karp said.

BBVA Compass chief economist testifies at Texas Senate on impact of Mexican energy reforms on state – MarketWatch.

CONFERENCE Mexican Oil &Gas Opportunities Sep 30 – Oct 2

Reform is transforming the Mexican oil and gas industry, with events unfolding rapidly in 2014 as secondary legislation is enacted in April and as “Round Zero” wraps up in September. Once Pemex and the regulators determine what Pemex is keeping, what becomes available, and what joint ventures will be constructed, new, concrete opportunities for oil and gas companies to do business in Mexico will become evident.Along the oil and gas chain, first movers – including E&Ps, midstream companies, infrastructure developers, transportation and logistics providers, investors and others – are positioning themselves as oil and gas development in Mexico ramps up. As a result of reform, new infrastructure and oil and gas facilities will be built, new partnerships and joint ventures will form, and new players will work with more established players to fully capitalize on all the opportunities coming with the massive changes to the oil and gas industry. What players will see new opportunities, and where, and how can they fully leverage them? One thing is certain: those who develop plans early will benefit the most.

via Mexican Oil & Gas Opportunities: Post-Reform II | An Infocast Deal Working Event.

Mexican cartels steal billions from oil industry

Mexico overcame 75 years of nationalist pride to reform its flagging, state-owned oil industry. But as it prepares to develop rich shale fields along the Gulf Coast, and attract foreign investors, another challenge awaits: taming the brutal drug cartels that rule the region and are stealing billions of dollars’ worth of oil from pipelines.Figures released by Petroleos Mexicanos last week show the gangs are becoming more prolific and sophisticated. So far this year, thieves across Mexico have drilled 2,481 illegal taps into state-owned pipelines, up more than one-third from the same period of 2013. Pemex estimates it’s lost some 7.5 million barrels worth $1.15 billion.Pemex director Emilio Lozoya called the trend “worrisome.”More than a fifth of the illegal taps occurred in Tamaulipas, the Gulf state neighboring Texas that is a cornerstone for Mexico’s future oil plans. It has Mexico’s largest fields of recoverable shale gas, the natural gas extracted by fracturing rock layers, or fracking.Mexico, overall, is believed to have the world’s sixth-largest reserves of shale gas – equivalent to 60 billion barrels of crude oil. That’s more than twice the total amount of oil that Mexico has produced by conventional means over the last century.The energy reform passed in December loosened Mexico’s protectionist policies, opening the way for Pemex to seek foreign investors and expertise to help it exploit its shale fields. It hopes to draw $10 billion to $15 billion in private investment each year.The attractiveness of the venture may hinge on bringing Tamaulipas under control.“The energy reform won’t be viable if we aren’t successful … in solving the problem of crime and impunity,” said Sen. David Penchyna, who heads the Senate Energy Commission. “The biggest challenge we Mexicans have, and I say it without shame, is Tamaulipas.”

via Fuel Fix » Mexican cartels steal billions from oil industry.

EnCap Investments and Riverstone Holdings form Mexico’s first independent energy company

Private equity players in Houston have teamed up to form what is being dubbed Mexico’s first independent oil and gas exploration and production company.Houston-based EnCap Investments LP and New York-based Riverstone Holdings LLC, which has a major Houston presence, are each investing $225 million in the formation of Mexico City-based Sierra Oil & Gas S de RL de CV. Mexico’s Infraestructura Institucional, which helps develop infrastructure, pumped in another $75 million to create a total investment of $525 million. All three investors retain the option to double their existing commitment once the initial equity has been fully invested.

via EnCap Investments and Riverstone Holdings form Mexico's first independent energy company – Houston Business Journal.

Mexico invites Malaysian O&G sector to invest in assets

KUALA LUMPUR, Sept 7 — Malaysian oil and gas O&G and energy companies have been urged to tap into the vast opportunities in Mexico which has recently opened its O&G and electric industries to private and foreign investors after over 70 years of state control.    Mexico’s Ambassador to Malaysia Carlos Felix Corona said the energy reform allowed foreign direct investment and profit-sharing in Mexico’s O&G exploration, refinement, production, transportation and storage, which until recently was the monopoly of state-owned Petróleos Mexicanos Pemex.He said Mexico invites foreign bids for O&G blocks from deep waters to mature fields and non-conventional reserves such as shale gas production from January 2015.         The Mexican government has identified 109 blocks for the first round of bids and expects investments of around US$50 billion over the next four years, including partnerships with Pemex.

via Mexico invites Malaysian O&G sector to invest in assets | Money | The Malay Mail Online.

Mexico Shale Gas Review Texas Senate to hold public hearing on the impacts of Mexico´s energy reform

There will be a public Senate hearing this week in Austin, Texas held by the Natural Resources Comittee. The discussion will center around the impact of Mexico´s energy reform on Texas.The hearing will examine the impact on Texas’ economy and businesses of the recent expansion of oil and gas production in Northern Mexico. Discussion will attempt to assess opportunities for economic growth in Texas and collaboration between Texas businesses and Mexico resulting from Mexico’s energy reform, including Mexico’s efforts to recover shale gas from the Eagle Ford Shale.Details below:COMMITTEE: Natural ResourcesSUBCOMMITTEE: Studying Impacts of Mexico’s Energy Reforms on TXTIME & DATE: 9:00 AM, Friday, September 19, 2014PLACE: E1.012 Hearing RoomCHAIR: Senator Juan HinojosaNatural Resources CommitteChair: Sen. Troy FraserVice Chair: Sen. Craig EstesMembers: Sen. Bob Deuell, Sen. Rodney Ellis, Sen. Kevin Eltife, Sen. Glenn Hegar, Sen. Juan Hinojosa, Sen. Robert Nichols, Sen. Kel Seliger, Sen. Carlos Uresti, Sen. Judith Zaffirini

via Mexico Shale Gas Review Texas Senate to hold public hearing on the impacts of Mexico´s energy reform | Mexico Shale Gas Review.

Mexico Shale Gas Review Kansas City Southern prepares for increased demand in transportation from Mexico Energy Reform

The structural reforms that are in the process of implementation by the Mexican government will open the gates for increased foreign and domestic investment in various sectors, in particular the energy industry. The president of Kansas City Southern Mexico, Jose Zozaya, has spoken openly about the need to be prepared for the increase in demand for transportation both domestically and internationally. In fact, the company is investing significantly in its existing infrastructure to better support cargo weight and increase speed and efficiency of their rail system.

via Mexico Shale Gas Review Kansas City Southern prepares for increased demand in transportation from Mexico Energy Reform | Mexico Shale Gas Review.

U.S. Natural-Gas Exports Fuel Mexican Manufacturing Boom

The growing glut of U.S. natural gas is helping to power a manufacturing boom in Mexico.Natural-gas exports across the southern border have risen 11% so far this year, to two billion cubic feet a day, according to Bentek Energy, an analytics company based in Denver.And that flow of gas could double in the next few years, analysts say. Companies have announced plans for at least seven new pipelines to take gas across the border from Texas and Arizona, including one expected to start transporting fuel at the end of the month.The increasing flow of gas is easing a supply shortage in Mexico, where fuel is costly and industrial demand is booming in industries including electricity production, petrochemicals and auto manufacturing, which has roughly doubled since 2009.The exports are also helping to reduce the overabundance of gas drillers that are pumping in areas such as the Eagle Ford Shale in South Texas, where gas is trading for less than the U.S. benchmark.While Mexico has significant shale resources of its own, its energy companies have lacked the expertise and desire to tap them, analysts say. The country has been meeting its fuel needs in part by importing liquefied gas that can cost three times as much as piped-in gas from the U.S.”The Mexicans have an incentive to import U.S. gas because it’s basically dirt cheap for them compared to other sources of energy,” said Sandy Fielden, an analyst at RBN Energy LLC in Houston.Eventually Mexico is expected to start producing its own gas as its energy industry—long run by national monopolies—is opened to competition over the next several years. But in the meantime, importing a flood of cheap natural gas from the U.S. should help ease public skepticism about the benefits of Mexico’s new, more free-market energy policy.

via U.S. Natural-Gas Exports Fuel Mexican Manufacturing Boom – WSJ.

Mexico Could Provide the Next Emerging Energy Market

If we needed any more proof that government-run industries are destined for disaster, just look at Mexico.To date, the country’s oil and gas sector has been under the control of the government and its proxy, Pemex.Like most countries with government-controlled assets, any profits generated by the industry end up being diverted elsewhere. As a result, the country is experiencing the lowest level of oil production in 24 years.In many parts of Mexico, electricity is more costly per kilowatt-hour than in the United States. And given its paltry exploration efforts, it currently relies on imports for natural gas.That being said, there’s still a huge opportunity brewing south of the border.In fact, while it might seem unthinkable, the potential for a Mexican energy boom could be just as massive as the one in the United States.

via Mexico Could Provide the Next Emerging Energy Market | Wall Street Daily.

How to Play Mexico Shale

On August 11th, Mexican President Enrique Pena Nieto created an unprecedented investment.After years of declining production, the president signed into reforms into law that end the 75 year old monopoly on Mexico’s oil and gas reserves.For those seven decades, Petroleanos Mexicanos PEMEX had complete control over all of Mexico’s oil and gas assets. But as their production declined in recent years so too did the revenue that Mexico’s government relied on.Remember, Pemex’s daily oil production has declined by nearly 1 million barrels per day in as little as ten years.Even with the reforms they will still have a huge presence there, but now other oil companies can have a crack at Mexican fields.And many vying for the newly opened oil and gas real estate are American companies with experience in the Eagle Ford Shale.

via How to Play Mexico Shale.