In the midst of the liberalization of Mexico’s oil and gas industry, PEMEX faces a new series of challenges coming from an increasingly competitive market and the evident reduction of its market share. In the meantime, Congress adopted new regulations to battle hydrocarbon theft, New Zealand shocks the world with an offshore-related announcement and Canada’s ambitious Trans Mountain project crashes.
Keen on taking a deeper look? These are the most relevant news of the week:
The largest LPG associations in Mexico called out the overburdening administrative procedures that are hindering the business and the entry of new market players. The controversy has prompted the Federal Commission for Economic Competitivity (COFECE) to study the probable existence of monopolistic practices, while the Ministry of Energy talked about the possibility to impose price caps in the central region of Mexico.
The Mexican Senate has enacted a rule to enforce stricter sanctions on hydrocarbon and petrochemical theft with penalties that go from 20 to 30 years of imprisonment to those illegally extracting resources from pipelines, sites or vehicles. This regulation responds to the increasing number of burglary reported in the hydrocarbon industry in the country.
In light of the increasing competition in the retail fuel sector, PEMEX has offered incentives to its franchise owners to invest in brand visibility and improve their establishments. These incentives seek to maintain the company’s market share and can imply cash bonuses for up to MX$30,000, based on pro rata monthly sales.
The Mexican Association of Hydrocarbon Companies (AMEXHI) held its third National Oil Convention to reflect on the 2040 Agenda, set to achieve the efficient implementation of the New Mexican Energetic Model and create an open economy with private sector participation in the entire production chain.
The development of 37 non-conventional blocs in Tamaulipas could potentially generate US$2.3 billion in revenue and around 23 thousand direct and indirect jobs in the state, said the president of the National Hydrocarbons Commission Juan Carlos Zepeda. His comments were gathered during the Energy Forum in Tamaulipas that brought industry leaders together to discuss the state’s energy capacity and marketability.
Oil and gas goes back to the presidential elections agenda after candidate Andrés Manuel López Obrador promises to “freeze” fuel prices if elected president. The comments prompted a reaction from Energy Minister Pedro Joaquín Coldwell, who stated that such move could destabilize public finances and cause fuel prices to go sky-high once the measure is over.
During a state visit to Paris, Saudi Arabia’s Crown Prince Mohammed bin Salman officiated the signing of eight MoU’s worth US$10 billion between Saudi Aramco and French counterparts, including Total. Major contracts are expected to be formalized when French president Emmanuel Macron visits the kingdom later this year.
Canada’s Trans Mountain plan entered a deadlock phase after the negative of British Columbia’s provincial government to pass the bid. The US$5.8 billion project is expected to boost the country’s oil sands industry by setting a pipeline from Edmonton, Alberta to Vancouver, BA. The project’s impasse led Kinder Morgan, the contracting company, to establish May 31 as the deadline to scrap the project should an agreement not be reached.
The New Zealand government announced the cancellation of further offshore oil and gas exploration permits in a move to achieve full renewable power generation by 2035 and turn into a carbon-neutral economy by 2050. The measure will not affect existing permits, expecting the country to mining burning fossils until 2050.
The UAE Energy Minister, Suhail Al Mazroui, claimed that the majority of OPEC member states, partners and independent oil producers who agreed on cutting oil production to boost prices in January 2017 are interested in forming a long-term alliance. The agreement, extended until the end of 2018, has raised the group’s interest in to further discuss coordinated action in the matter.
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