We recently posted a brief review of some of the key reforms already implemented or proposed under the administration of recently elected Mexican President Enrique Peña Nieto. The most highly anticipated, controversial and sure to be hotly disputed of these initiatives, the president’s energy reform proposal, was finally presented to Congress on August 12. In the long run-up to the presentation of the official proposal, the conservative opposition National Action Party (PAN) presented its own energy reform program, and the leftist opposition Party of the Democratic Revolution (PRD) presented its alternative proposal shortly after the government made its presentation to Congress. Continue reading Mexico energy reform proposal brings high hopes and some skepticism
Post by Agathe Vigne for Mexico Business Blog
Petroleos Mexicanos (Pemex) and Mexico’s energy sector in general are bound to evolve in the next six years. That was one of Mexico’s newly elected president Enrique Pena Nieto’s seven campaign promises. To embody that change, EPN is counting on two new leaders at the head of the ministry of Energy (Sener) and Pemex.
The new energy minister, Pedro Joaquin Coldwell, is a 62-year-old seasoned politician. A long-time member of the PRI, Coldwell has occupied a variety of positions inside the party and has served as local and federal deputy and senator for the state of Quintana Roo.
On the other hand, 37-year-old Emilio Lozoya Austin has been at the head of private companies and investment funds, as well as Director for Latin America at the World Economic Forum. Except for his past stint as analyst at Mexico’s Central Bank, Banco de Mexico, Emilio Lozoya has no real experience in government. However, he is the son of a former energy minister under Carlos Salinas de Gortari, Emilio Lozoya Thalmann.
Though their profiles strongly differ – Coldwell, the experienced politician specialized in tourism and development, and Lozoya, the young financial shark – they have one thing in common: they are new to the energy sector. That could be seen as a weakness, as critics already warn of the privatization of Pemex and the uncontrolled selling of national resources to transnational companies. Continue reading Reshaping the Mexican energy sector
Agathe Vigne returns with some thoughts on recent reports of new deepwater petroleum reserve discoveries in Mexico.
In its last energy security report, the U.S. Chamber of Commerce pointed to Mexico as the most energy-secure country in the OECD. The writers of the report underscored various factors reinforcing the country’s energy security: the existence of large shale resources in the north of the country, recent deepwater discoveries and low energy expenditures and carbon emissions per capita.
The report highlights the importance of Mexico as the world’s seventh largest oil producer (according to the OECD), and to the country’s efforts to support the development of alternative energies.
The context is very favorable for Mexico’s O&G sector. Indeed, President Felipe Calderon announced the discovery of two new deepwater fields: Trion I (est. 250 – 400 mn barrels) and Supremus I (est. 75 – 175 mn barrels), both drilled in the Perdido fold belt area. In parallel, the exploitation of mature fields and shale gas reserves should help compensate for the declining production of the country’s principal oil field, Cantarell.
Nevertheless, the U.S. Chamber of Commerce’s report is not as positive for Mexico as it might seem. The report states that “Mexico’s energy security risks…are worsening at a faster rate than for the OECD as a whole. As a result, Mexico’s advantages are shrinking: From a 1980 score 34% better than the OECD average, Mexico’s score in 2010 was just 14% better.” Apart from Cantarell’s sharp production decline, the report cites factors threatening Mexico’s energy security, such as the need to import natural gas and coal, political choices favoring thermal power and increased per capita consumption.