Amid uncertainty concerning PEMEX’s credit rating in the near future, President-Elect López Obrador’s team and the incumbent administration are laying the groundwork of the country’s energy policy transition. Meanwhile, the US concluded its second oil and gas lease in the GoM of 2018 and its oil companies are facing higher production costs.

 

Ready to strike oil? Here’s your weekly news roundup:

 

 

NATIONAL

 

Moody’s Keeps Stable Perspective for the First Year of AMLO’s Administration. The credit rating agency had a different evaluation of the President-Elect’s energy program, however, as it casts uncertainty over PEMEX and its credit rating in the near future.

 

PEMEX Files for Donation Reimbursement Against Veracruz. The NOC is requesting the immediate payment of MX$135 million worth of donated gasoline, diesel, asphalt and jet fuel in 2015. The local government of Veracruz did not present the required documentation to justify the allocation of said donations throughout that year.

 

Private Sector Imports 23 Percent of the Country’s Diesel. Last June, private players imported 1.86 million barrels of diesel, the highest monthly amount since June 2017.

 

Talos Energy will Present Zama Investment Plan in 2019. Timothy Duncan, President and CEO of Talos Energy and member of the Zama consortium with Sierra Oil & Gas and Premier Oil, expects to have the asset’s evaluation plan approved by 3Q18.

 

Natural Gas Production: Mexico’s Energy Challenge. The country is facing a demand surge for the fuel, while PEMEX’s production capacity is on the decline.

 

AMLO Plans to Invest MX$4 billion in Crude Oil Production. The President-Elect announced during a press conference that his administration will allocate this amount to E&P activities in the states of Veracruz, Tabasco and Chiapas to increase the country’s oil production.

 

Pedro Joaquín Coldwell and Rocío Nahle Meet to Launch Energy Policy Transition. It is the first of a series of work meetings to ensure a successful handover process between the incumbent and future Minister of Energy.

 

US Looking for Continuity in Energy Alliance with Mexico. The US Energy Minister, Rick Perry, is scheduled to meet with incoming Energy Minister Rocío Nahle and other Mexican energy officials to discuss bilateral synergies in energy issues between both countries and is expected to attend 2018’s FIRST Global Challenge in Mexico City. After the meeting , Perry applauded Mexico’s goal to become natural gas self-sustaining, highlighting it did not represent a threat to US refineries.

 

AMLO’s Refining Plans Would Generate Fuel Oil Surpluses for PEMEX. Rubén Cruz, Lead Partner in Energy and Natural Resources at KPMG, believes the President-Elect’s MX$50 billion to inject in refining would only cover maintenance works. Refining plant reconfiguration requires close to MX$144 billion. He also said increasing local refining activities would create excess fuel oil as the refineries’ main client, CFE, has transitioned toward natural gas to fuel its thermoelectric plants.

 

First LNG Terminal of Baja California Sur Under Construction. After formally obtaining the contract from the Integral Port Administration of Baja California on July 19, 2018, New Fortress Energy began construction works for the terminal on Aug. 16, 2018. The terminal will be built in Pichilingue port and is expected to be operational by 2020.

 

Walmart Enters the Gas Station Game. The retail heavyweight launched a first phase with six service stations located in the states of Tabasco, Nuevo Leon, Veracruz and the State of Mexico.

 

 

INTERNATIONAL

 

US Oil Companies Bring Out the Big Bucks to Face Increased Production Costs. Despite a recent upturn in oil prices, US oil companies are facing difficulties in increased operational costs to improve the production efficiency of their assets.

 

Andeavor is for Sale. Marathon Petroleum is in talks with Gregory Goff, President of Andeavor, to create a refining giant. The purchase price is estimated to be close to US$23.3 billion. The transaction is expected to be closed by October 2018.

 

Ecuador Allocates Four Exploration Blocks to Private Initiative. The government bid the Cuyabeno, Yuralpa, Oso and Blanca-Vinita fields in the Amazon region. With a US$728 million investment committed up to 2021, Mexican Avanzia, Venezuelan Vinccler and Ecuadorian Triboilgas won the bids for said fields.

 

Venezuelan Crude Oil Production Drops to 1.2 million b/d. According to OPEC’s Monthly Oil Market Report published Aug. 13, the drop represents 47,700b/d less in July 2018 compared to the previous month.

 

Brazil’s National Petroleum Agency (ANP) Increases Profit-Oil Percentages for Fifth Subsalt Round. Scheduled for Sept. 28, 2018, the Saturno prospect, deemed the most attractive asset of the Fifth Subsalt Round, will require a minimum oil-profit guarantee raised to 17.54 percent from the initial 9.56 percent.

 

Second US Oil and Gas Lease of 2018 in the GoM yields US$178 million. Deputy Secretary of the Interior David Bernhard announced the results for the 144 tracts, bid by 29 companies. Among the bidders, Talos Energy announced its top five bidder status, with a 100 percent success rate on all 14 blocks it bid on.

 

North Sea Oil Workers Union Unite Goes on Strike. After it concluded French IOC Total did not respond satisfactorily to the union’s counter-proposals, Unite planned a 24-hour halt in activity at the Alwyn, Dunbar and Elgin-Franklin facilities.

 

Equinor, Repsol and Neptune Strike Oil in the Norwegian Coasts of the North Sea. The discovery was made in the Gudrun field after the successful conclusion of the consortium’s drilling activities.

 

 

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