Last week was rich in oil and gas news, from AMLO’s 25 priority projects to oil workers calling for oil syndicate leader Carlos Romero Deschamps to resign and PEMEX securing the Deer Park partnership with Shell. Meanwhile, Iraq reaches a new oil production record, the US reactivated Iran’s sanctions and Nexen is poised to launch its development plans for its North Sea assets.
Ready to drill through the week’s top stories? Here’s your weekly news roundup:
President-elect AMLO Announces 25 Priority Projects. During an event organized by different civil engineering associations, unions and universities, AMLO outlined the priorities of his incoming administration, including the construction of 300 rural roads; guaranteeing internet access in public squares, schools and hospitals; the New International Mexico City Airport; the Mayan train, the Tehuantepec Isthmus corridor; the Dos Bocas refinery, and the reconfiguration of the six operational refineries.
Nahle Rules Out Prosecuting Oil Worker Syndicate Leader. Addressing the press after a private meeting with President-elect AMLO, the next Minister of Energy considered it fell on the oil industry workers to keep Carlos Romero Deschamps, current oil worker syndicate leader and PRI party senator accused of embezzling the syndicates’ funds for personal benefits.
AMLO’s Energy Transition Team Began Licensing Rounds’ Contracts Revision. During an interview in Mexico’s National Palace, Rocío Nahle, the next Minister of Energy, confirmed to the press her team has started the revision of the 107 licensing round’s contracts, which she estimates will conclude in two to three months.
Oil Workers Demand Carlos Romero Deschamps’ Resignation. Active and retired workers of PEMEX demanded the syndicate leader’s resignation an impeachment to answer to his accusations over illicit enrichment, filed before the Attorney General’s Office in 2012. The request is part of the National Movement of Oil Transformation’s (MNTP) platform, looking to postulate María de Lourdes Díaz Cruz to lead the oil workers syndicate.
PEMEX Imports Ethane. A 10-year production drop that fell from 2.6 million tons in 2007 to 0.6 tons in 2018, added to PEMEX’s ethane supply contract with Braskem IDESA, cornered the NOC to bid ethane imports, won by Vitol. The company is poised to provide 144,000 tons of ethanol to PEMEX in 2018, followed by a capped supply of 288,000 tons per year for 2019 and 2020.
PEMEX Secures Deer Park Refinery Partnership. The agreement stipulates the NOC can place Mexican crude oil over the next 15 years in Shell’s Deer Park refinery, allowing PEMEX to guarantee stable prices for the Mexican oil mix in the long-term.
AMLO will Inherit Tula Project. PEMEX launched the Tula refinery’s reconfiguration in 2014. So far, the NOC has invested US$1 billion and is looking for a partner to inject an additional US$1.6 billion to conclude phase 1: enable the refinery’s coking plant to transform fuel oil into gasoline and diesel. The project’s second phase will require an additional US$2 billion. Tula’s reconfiguration is set to conclude by 2022.
Mexican Petroleum Fund Reports MX$265 billion in Income in 1H18. The reported income corresponds to ordinary transfers, equivalent to 1.2 percent of the country’s GDP. On June 30, the Fund’s reserves amounted to US$990 million and registered 109 E&P contracts, with 418 allocations to PEMEX.
CRE Approves New Tariffs for Kerosene Storage. While Airports and Auxiliary Services (ASA) used to have exclusiveness as kerosene traders and suppliers, CRE determined it now must open all of its 60 terminals across the country for kerosene storage to interested third-parties, via storage rates.
BHP Billiton to Invest MX$1.7 billion in Trion. The Australian IOC will allocate that investment toward drilling activities in its deepwater farmout-block Trion.
Progreso Special Economic Zone (ZEE) Sparks Investor’s Interest. Gerardo Gutiérrez Candiani, Head of the Federal Authority for the Development of the Special Economic Zones (ZEE) stated during an encounter with Yucatan governor-elect, Mauricio Vila Dosal that 16 different companies are interested in injecting US$220 million in Progreso’s ZEE, representing 3,550 potential new jobs for said zone.
Capricorn Energy and Citla Energy’s Consortia Relinquishes Parts of Round 3.1 block. Both IOCs declared an irrevocable waiver over 49 percent of the area due to environmental protection matters. CNH approved the resolution of anticipated termination on Aug. 8.
Ministry of Energy Discards Fracking in San Luis Potosi. PEMEX’s Ébano field activities, will not include the use of fracking techniques, said Pedro Joaquín Coldwell, Minister of Energy, in response to an information request from San Luis Potosi governor, Juan Manuel Carreras López.
Gas Station Companies Defend Price Fluctuation Business Model. During the presentation of the study “Insight Smart Mobility: What Direction Should Large Cities Walk Toward,” elaborated by Endeavor Mexico and Gulf, Sergio de la Vega, Director General of Gulf Mexico, considered pairing gasoline prices to inflation, as the new administration plans to do, equates price control. This measure would lead service station companies to revise their business plans in Mexico.
Gasoline Prices Break the MX$21/l Mark in Mexico City. CRE reported a gas station in the Venustiano Carranza municipality is selling premium gasoline for MX$21.04/l.
Murphy Oil Prepares Offshore Exploration Comeback. As oil prices are recuperating from a three-year downturn, Murphy Oil decided to change its exploration strategy, in which the Gulf of Mexico will play a preponderant role.
Energy Model Needs to Mature Before Being Modified. Such was the call from industry experts gathered in the “Balance of Structural Reforms, from Pact to Action” forum, organized by the Senate’s Belisario Domínguez Institute. Forum participants’ conclusions include financially strengthening PEMEX and CFE, further diversifying private participation and gradually eliminating Mexico’s oil financial dependency, contributing to 30 percent of the country’s income.
Gasoline and Natural Gas Continue Feeding Inflation. The National Consumer Price Index (INPC) registered two consecutive months increase due to the price increase of these fuels, generating an annual inflation rate of 4.81 percent.
Salina Cruz Refinery Halts Production due to Electricity Malfunction. The refinery has met a series of hindrances impacting its production since Jan. 2018, including a flood that started a fire, added to a production halt in Sept. 2017 due to the country’s violent earthquake.
UK Government Greenlights Nexen’s Development Plans for Buzzard Field. With the approval of the UK Oil and Gas authority and the full sanction of development partners Suncor, Chrysaor, Dyas, Oranje-Nassau Energie, Nexen will launch phase II of the North Sea’s Buzzard field.
US’ Iran Sanctions Cause Oil Price Hike. After the Trump administration reactivated sanctions against Iran on Aug. 7, futures from Brent and WTI experienced 1.22 percent and 0.95 percent index price increases, respectively.
US Gasoline Producers Report Greater Profits during 1H18. The country’s booming oil production, paired with West Texas and Canada’s bottlenecked pipeline capacity, are the primary factors behind this bonanza.
Iraq Reaches Oil Production Landmark of 4.46 million b/d. OPEC’s agreement to increase production allowed the second largest oil producer within the organization reach a 13-month record in July 2018.
owed the second largest oil producer within the organization reach a 13-month record in July 2018.
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