Energy / Oil & Gas
As in any other developing nation, the energy sector is of key importance to Mexico for its current and future development. In Mexico, the energy sector is particularly politicized and forms the centre of debate between political factions in Mexico regarding the pace and nature of reform. The government of President Felipe Calderón, a former Secretary of Energy, led reforms to the social security pension system, the electoral system and the fiscal system over the course of its first year of its administration. The government has now presented its energy reform package, which is being debated now by the Mexican Congress. To learn more about the reform proposal, see:
Energy Secretariat website: http://www.sener.gob.mx/ (Spanish)
Mexican Presidency's website: "Pemex se fortalece" (Spanish)
The accelerated decline in Mexico's oil production and the scope of Pemex's operational challenges are increasingly accepted as fact in Mexico, and consensus is emerging that Mexico's energy sector requires urgent reform. Debate now centres around what form these changes should take. While minor reforms may be implemented before the fall of 2008, it is expected that significant change will have to wait at least until after the mid-term elections in 2009.
That said, energy reform in Mexico is best viewed as a long-term project. The market potential is huge, in terms of reserves, demographics and Pemex's spending. One of Mexico's upsides has traditionally been its stability, in contrast to other more volatile Latin American markets.
Alberta and Mexico Sign Declaration on Cooperation in the Field of Energy
The Hon. Guy Boutilier, former Minister of International, Intergovernmental and Aboriginal Affairs visited Mexico City from March 7-10, 2007. During his visit, the Minister signed and approved an agreement on behalf of the Government of Alberta signed by the Honourable Mel Knight, Minister of Energy and Dr. Georgina Kessel, Secretary of Energy of Mexico.
For more information on Minister Boutilier's visit or on the agreement, please see the following press releases:
- Boutilier works with Mexico to expand trade, build stronger relations, March 6, 2007 Alberta and Mexico sign energy cooperation agreement, March 8, 2007 Declaration (pdf)
Nexen signs collaboration agreement with Pemex
On October 5, 2007, Calgary-based Nexen Inc. signed a collaboration agreement with Pemex. For more information, see Nexen's press release (posted with permission).
Opportunities for Alberta Companies
Significant opportunities exist for Alberta companies in Mexico in power generation, certain types of infrastructure such as pipeline construction, and for service companies as well as equipment manufacturers and consulting services for the upstream oil and gas sector. Examples of these include opportunities in seismic, geophysical, drilling, completions and production work, as well as soil remediation and other environmental work. For example, in 2006, PEMEX's total budget was approximately USD$11.3 billion, with USD$10.1 billion being spent on production and USD$1.2 billion being spent on exploration. PEMEX Exploration and Production [PEP], Pemex's largest operating division, has announced that it plans to invest on average USD$12.5 billion per annum through 2010. PEMEX CEO Jesús Reyes Heroles has also said that PEMEX must invest USD$3bn to $4bn per year in refining to maintain current production levels.
Off-shore and Deepwater Gulf of Mexico
Increasingly, the future of Mexico's production will be in deep waters in the Gulf of Mexico - this is one of the major drivers of reform, since Mexico's giant Cantarell deposit is now in decline (see Rigzone, January 29, 2007, "Mexico's Oil Output Cools").
Enchanced Recovery, Marginal Fields and Coal Bed Methane
Enhanced recovery and production from marginal and mature fields continues to grow in importance at PEMEX, and will continue to do so as PEMEX seeks to offset the decline in production at Cantarell with, amongst other things, an ambitious drilling program in Chicontepec (near Poza Rica, Veracruz). Major fields requiring enhanced recovery included Caan, Abkatun and Taraturich, all in the Southwest Marine Region. Other fields, in the North and South Regions, will increasingly require enhanced recovery technologies in the future, such as Macuspana, Ogarrio-Magallanes and Delta de Grijalva.
Coal Bed Methane is also an emerging area of potential opportunity for Alberta companies, depending on the course of legislation. It was expected that new regulations related to Coal Bed Methane would be released around March 2008. Alberta companies may wish to explore alliances with Mexican mining companies in order to explore this opportunity.
Pemex Exploration and Productions's Priorities
PEP stated that its priorities for 2007 were to:
- Administer the decline of Cantarell
- Maintain production at 3 million barrels per day of crude oil and production of natural gas at 6,500 mm cubic feet per day
- Maintain competitive production costs
- Continue revitalization of exploration
- Keep a relation of proven reserves to production of 9 years
Active Market Opportunities - IIAR's Electronic Business Intelligence Service [EBIS]
EBIS is your best source for Alberta specific, pre-pipeline information and intelligence on pre-tender business opportunities in Mexico's oil and gas sector. Current and active project specific market opportunities and the latest market intelligence on Mexico's oil and gas sector is available on the following Government of Alberta website, at:
Mexican Government Internet Procurement Site
Calls for tenders are published in Spanish on the Mexican government's Internet procurement site:
For more detailed information on the energy sector in Mexico, see:
For further information, contact:
- Tim Beals, Trade Director, North America, Alberta International and Intergovernmental Relations [IIR]
- David Nygaard, Managing Director, Alberta Mexico Office
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