Offshore Oil Rig. Source: Pixabay

Offshore Oil Rig. Source: Pixabay

While PEMEX is going to great lengths to commit to its market-bolstering obligations, some of Mexico’s liberalized oil and gas market ambitions seem to be grasping at straws. Meanwhile, gasoline prices remain shielded from international markets. It was certainly a busy week for Mexico’s productive enterprise of the state and for the international oil and gas industry, with production drops reported among OPEC countries and new business in Cuba, Brazil and Iran.


Ready to know more? Here are the relevant oil and gas news of the week:




PEMEX eyeing unconventional fields for Round 3.3. The productive enterprise of the state is looking to enhance and diversify its project portfolio with new, unconventional blocks, taking advantage of the positive momentum created by Round 3.1’s results.


IEA highlights challenges and opportunities in Mexico’s unconventionals. In an interview with Reforma, Laszlo Varro, IEA’s Chief Economist, said that Mexico must deal with its northern neighbor’s more developed market and aggressive cost-efficiency.


ENI is analyzing options for Mexico’s would-be first private farmout. Qatar Petroleum is among the potential purchasers of 20-35 percent of Campeche bay’s offshore discoveries, of which the Italian multinational has 100 percent ownership. Should an agreement be reached, it would be Mexico’s first private farmout, in line with ENI’s “dual exploration” model to finance future developments and backing up dividends.


PEMEX to cede storage and pipeline capacity. All is set for PEMEX Logística to enable private initiative to reserve capacity and supply distributors, traders and service stations.


Depleted oil wells for storage capacity. CENAGAS is preparing the first storage tender to capitalize on depleted or economically unviable oilfields for storage applications.


Storage Terminal works greenlit in Altamira. Mexico’s Energy Minister, Pedro Joaquín Coldwell, placed the first stone of Avant Energy Suministro de Petrolíferos Altamira-Bajío’s storage terminal with a 1.2 million-barrel capacity. The project represents a US$500 million investment and Coldwell indicated it will create 2,000 jobs.


Hidrosina unveils storage plans. Paul Karam, Director General of Hidrosina, presented the service station group’s plans to build two storage terminals with a 200,000-300,000-barrel capacity in Mexico’s central region. Karam is planning to allocate between US$35-40 million for each terminal




PEMEX holds 80 of the 93 fuel quality testing laboratories authorized for operation by CRE, meaning the productive enterprise of the state is in charge of testing its own fuel, raising concerns over possible conflicts of interest.


Mexico’s IEPS Tax collection decreased 23.6 percent between February 2017 and February 2018. The Ministry of Finance maintains its grip in the Special Tax over Production and Services (IEPS) to avoid gasoline prices reflecting the international gasoline prices and mirroring exchange rate volatility.


Mexico’s 20 percent gasoline price hike in 2017 has pushed Mexican wallets away from 93-octane premium gasoline, meaning PEMEX now refines less than 2 percent of national demand for this product. Consumers turn to cheaper, 87-octane magna gasoline. PEMEX now resorts to importing the lion’s share of a diminished premium gasoline demand.


PEMEX cracking down on fuel theft. In a coordinated effort between Puebla’s local government, the Federal Attorney General, the Ministry of Finance, Federal Police and the NOC, 2,002 operatives intercepted 3,138 vehicles, 1,334 clandestine ground lines and more than 6 million fuel liters.




Trade war escalation between the US and China threatens to hit oil prices as China imposes tariffs on 128 US products in retaliation to the US tariff imposition on Chinese steel and aluminum. The first move came as China imposed a 15 percent tariff on steel pipes, impacting US oil and gas producers.

ExxonMobil leads offers for maritime fields in Brazil. The US multinational won eight blocks in consortium with other companies looking to capitalize on the country’s oil promise, to the point of offering US$844 million for a deepwater block in the Campos basin, together with Petrobras and Qatar Petroleum.


Cuba is drilling Latin America and the Caribbean’s deepest horizontal oil well. The well has already reached 6km in depth and is set to reach more than 8.2km.


YPF and ENAP inaugurate US$354 million offshore project. Located in Faro Vírgenes, the project is set to increase the oilfield’s natural gas production by 60 percent.


Russia is set to invest over US$50 billion in Iran’s oil and gas fields, the largest amount of capital since the latter’s sanctions were lifted in 2016. This project will see the first oil contract signed under the Islamic Republic’s new format and will include Russian giants such as Lukoil, Gazprom, Gazprom Neft, Rosneft, Zarubezhneft and Tatneft.


Bahrain’s National Oil and Gas Authority announced the island’s largest oil and gas discovery in history. The resource amounts over 80 billion barrels of shale oil and 20tcf of natural gas expected to be in full production over the course of the next five years. A first agreement for drilling has been signed with Halliburton for 2018.


OPEC’s crude production fell to its lowest rate in a year, according to a survey conducted by Bloomberg news. The organization’s output fell to 30 million barrels in March 2018, the lowest figure since April 2017’s production of 31.9 million. The plunge was led by production declines in Venezuela (100,000b/d), Algeria (40,000b/d) and Saudi Arabia (10,000b/d), added to the sharp production drop of Libya and Algeria.


US refineries bracing for impact of Venezuelan sanctions. A report released by S&P Global Platts found five refineries import the lion’s share of Venezuelan crude sent to the US and are finding ways to counter the sharp drop of Venezuelan oil imports, either by lobbying against Venezuelan oil sanctions or scouting imports from Canada, Africa or South America.


Bloomberg New Energy Finance’s Global LNG Outlook 2018 reports LNG’s demand will reach 305MMtpa in 2018, a 7 percent increase compared to 2017.



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