September 6, 2016 – Bulk Transporter
Transformation occurring in Mexico’s energy sector
MEXICO is immersed in an ambitious program to do to four markets—gas, crude oil, petrochemicals, and electricity—what the United States did to one market (natural gas) in seven years, according to Rusty Braziel, featured luncheon speaker on May 23 during the International Liquid Terminals Association’s 2016 International Operating Conference in Houston, Texas.
In his presentation, “Going to Mexico! New Opportunities in Mexico’s Oil & Gas Markets,” Braziel of RBN Energy said Mexico’s new energy market started on December 20, 2013, when Mexican President Enrique Peña Nieto signed historic constitutional reforms related to Mexico’s energy sector aimed at reversing oil and gas production declines and 75 years of a nationalized market.
On August 11, 2014, secondary laws were passed to implement those reforms and officially open Mexico’s oil, natural gas, and power sectors to private investment.
That provides for:
• Maintaining state ownership of subsoil hydrocarbons resources, but allowing companies to take ownership of those resources once they are extracted and to book reserves for accounting purposes.
• Creating four types of contracts for exploration and production in: service contracts, profit-sharing contracts, production-sharing contracts, and licenses.
• Opening refining, transport, storage, natural gas processing, and petrochemicals sectors to private investment.
• Transforming Pemex into an autonomous company.
• Strengthening regulatory agencies.
“Blocks/contracts are awarded to private operators under competitive tender,” Braziel said. “On the downstream side, there’s full liberalization for ownership and operation of natural gas, liquids and products pipelines and terminals by private players. Natural gas transportation business was divested from Pemex into a separate company: CENAGAS. Liquids terminals and pipelines are owned by Pemex subject to a mandatory open season. Marketing business is open to private parties. Both private and federal government-anchored pipeline projects are permitted…
Read the full story here: http://bulktransporter.com/trends/transformation-occurring-mexico-s-energy-sector
