It emerged last week that plans to invest USD 11bn in a refinery plant in Tula were removed from the Pemex 2014-2018 Business Plan, following fears that the level of investment could place the NOC under untenable pressure. The refinery, which was widely regarded as former President Calderón’s flagship project, requires the collaboration of the private sector in order to be successful, according to Energy Minister Pedro Joaquín Coldwell. The Minister also pointed out the lack of common sense in the restrictions Pemex is currently subjected to, since the NOC is actually allowed to set up joint ventures abroad, as is the case with Deer Park, Texas. And David Penchyna Grub, President of the Senate Energy Commission, appeared to support the view that the combination of public-private joint ventures could provide the much needed boost required to lift the Mexican oil and gas sector.
Last week, on the same day that the CEO of Pemex Emilio Lozoya Austin confirmed that the final draft of President Peña Nieto’s reform proposal was in the hands of the Congress, the Wall Street Journal published a story involving advanced talks between the PAN and the current administration to incorporate production-sharing agreements into the proposal. However, until now, these allegations have been vigorously denied by the PRI, who say that they are merely trying to ensure that some of the exploration and production risks are passed on to the private sector, a statement which was backed by Lozoya.
The Wall Street Journal claimed in their story that the Government and the PAN were planning to draw up several different types of contracts according the types of fields: profit sharing agreements for low risk fields, shared production for high risk fields, and concessions agreements for ultra-deepwater and shale gas activities.
Various other sources have reported that the PAN is willing to write off any energy reform proposal that does not incorporate the liberal changes they are seeking, including E&P licensing. From his office in Mexico’s senate, Jorge Luis Preciado, the PAN’s coordinator in the upper house, told BNamericas they were not willing to negotiate on a watered-down energy proposal.
Pedro Joaquín Coldwell recently called for the creation of a sovereign oil fund, a PAN measure not previously mentioned by the minister. It would therefore appear that the current administration’s initial stance may have been somewhat loosened, in order to allow for a successful reform to go through.
There is no doubt that much activity is going on behind the scenes between PRI and PAN in order to reach an agreement , and given how sensitive the topic is, it is also unsurprising that only limited information has been made public. With Mexico’s economic outlook taking another downturn in recent weeks – is only expected to grow between 0.9% and 1.4% in 2013 compared to the previous forecast of 2% to 3% – the energy reform proposal is taking on a more prominent role, as hopes of an imminent recovery are pinned on its successful outcome. Indeed, President Peña Nieto confirmed this sentiment when he said that inertia in the oil and gas sector was the biggest threat to the growth of the Mexican economy.