EIA: Mexico’s energy reform will address many challenges

As Mexico prepares to lift its 1938 ban on private sector energy investment, many of the challenges that have resulted in a decade-long decline in Mexico’s oil production are promised to be addressed, according to the US Energy Information Administration.

“Last year, Mexico produced 2.9 million b/d of total liquids, continuing the decline from its peak of 3.85 million b/d in 2004. Crude oil is the most significant component of Mexico's liquid fuels production, accounting for at least 85% of production in the past 2 decades,” EIA said, adding that preliminary estimates indicated crude oil production in April was 2.5 million b/d—the lowest monthly average since 1995.

In late 2013, Mexico’s Congress approved an historic energy reform aimed at ending the 75-year monopoly of Petroleos Mexicanos (Pemex) and allowing for greater foreign investment.

The new reforms include:

• Create four oil and gas exploration and production contract models, including service contracts, production-sharing, profit-sharing, and licenses.

• Give Pemex first refusal on developing Mexican resources before private companies begin bidding rounds (Round Zero), in which Pemex can provide financial and technical plans to develop the resources within 3 years.

• Give regulatory authority over the oil and gas sectors to the Energy Regulatory Commission, the Secretary of Energy, and the National Hydrocarbon Commission, and create the new National Agency of Industrial Safety and Environmental Protection.

• Keep Pemex as state-owned but with more administrative and budgetary autonomy, and allow the company to compete for bids with other firms on new projects.

• Establish the Mexican Petroleum Fund to manage contract payments and oil revenue.

Before the reforms can take effect, Mexico’s legislature must finalize the secondary laws detailing the fiscal regime, including the contract terms for the exploration and production models and local content requirements. The secondary legislation is expected to be finalized by early August.

Unlike the contract terms and local content requirements, which require legislative action to implement, Pemex is already moving forward with its proposal to retain oil and gas assets in the deepwater oil fields in the Perdido fold belt and offshore gas fields in Lakach. These proposals have been submitted to the energy ministry and a final decision will be announced in September.

Related Articles

Rosneft, BP sign upstream, downstream agreements

06/19/2015

OAO Rosneft agreed to sell BP PLC a 20% share of Taas-Yuryakh Neftegazodobycha in eastern Siberia for $750 million.

Total sheds stake in German refinery

06/19/2015 OAO Rosneft has completed a deal for the purchase of Total SA’s minority interest in the 11.5 million-tonne/year PCK Raffinerie GMBH refinery, loca...

MARKET WATCH: NYMEX crude oil prices climb back above $60/bbl

06/19/2015 Crude oil futures for July delivery rose modestly on the New York market to settle above $60/bbl in June 18 trading, marking its highest closing pr...

Fossil fuel protestors try to disrupt Natural Gas Roundtable event

06/18/2015 Fossil fuel protestors tried to disrupt a June 18 Natural Gas Roundtable (NGR) luncheon on Capitol Hill where four US House members were describing...

PBF Energy inks deal for Louisiana refinery, logistics assets

06/18/2015 PBF Holding Co. LLC, a subsidiary of PBF Energy Inc., Parsippany, NJ, has entered an agreement with ExxonMobil Corp. and Petroleos de Venezuela SA ...

Gazprom, KMG extend Karachaganak supply contract to 2038

06/18/2015

OAO Gazprom and JSC KazMunayGas (KMG) reported a contract extension to 2038 for supply from Karachaganak gas-condensate field in Kazakhstan.

Zion Oil & Gas makes executive appointments

06/18/2015 Dallas independent Zion Oil & Gas Inc. has appointed Victor G. Carrillo as chief executive officer and Glen Perry as president and chief operat...

Axiall updates plans for Louisiana ethylene project

06/18/2015 Axiall Corp. and South Korea’s Lotte Chemical Corp. have finalized joint-venture plans for the design, construction, and operation of a proposed 1 ...

Wintershall to sell interests in five Norwegian fields

06/18/2015 Wintershall Holding GMBH plans to sell interests in five Norwegian fields to Oslo-based Tellus Petroleum AS. The $602-million transaction is expect...
White Papers

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected