The Weekly Brief: Mexico


February 1, 2020 edition—Pemex’s power permit; gas stations’ investment; and crude production falls.




Last Week in a Minute or Less


Electric Power & Renewables. The CRE okayed Pemex’s power generation permit; the Supreme Court put off the decision on AMLO’s energy policy; and the CFE will invest in generation, but renewable plants will not get a dime.


Natural Gas Mid-Downstream & LNG. Experts forecast natural gas growth.


Liquid Fuels Mid-Downstream. Gas station owners said 400 permits are halted; Pemex’s gasoline production was at 1993 levels; and gas stations will invest big to improve.


Oil & Gas Upstream. Pemex crude production fell 0.8% in 2020.


Government & NGO. Mexico defended its energy policy against foreign investors; AMLO forecasted a 5% GDP growth; and the IMF improved Mexico’s GDP forecast.


Déjà vu all over again. Last week’s readers were particularly interested in Mexico and the US bilateral relation (El Economista – Spanish); former CRE representatives’ opinion (El Financiero – Spanish); and USMCA’s panel for Mexico’s energy policy (El Financiero – Spanish).



Geopolitics & Trade


Mexico asked Biden to fix immigration. President López Obrador said that President Joe Biden should quickly launch an immigration plan, including giving dual nationality to Mexicans working in the US (Reuters – English). Biden plans to roll back the Trump administration’s harsh measures on migration.


Mexico defended its energy policy against investors. President López Obrador defended his focus on strengthening the state’s role in the energy sector. AMLO’s interventions have upset Mexico’s allies and angered investors who believe the government is violating their rights under trade agreements (Reuters – English).


Mexico offered more time to auto firms. Mexico’s government approved the request of 12 automotive companies for additional time to fulfill the new regional content requirements under the USMCA (Reuters – English) (El Financiero – Spanish). Under the new NAFTA, companies could request an alternative transition regime to comply with the requirements.



Political Economy


AMLO forecasted 5% GDP growth. President López Obrador said Mexico’s economy will grow up to 5% in 2021 after the COVID-19 crisis (El Financiero – Spanish). AMLO said the administration could help the population during the crisis with the savings obtained fighting “corruption and luxuries.”


Inflation reached 3.33% in January, hitting potatoes and gasoline. During the first two weeks of January, the National Index of Consumer Prices (INPC) reached 3.33% (El Financiero – Spanish). The prices that increased the most were potatoes, LP gas, and gasoline.


Economic activity grew 0.9% in November 2020. During November 2020, economic activity growth in Mexico reached 0.9%, boosted by secondary and tertiary activities (El Economista – Spanish). The Global Indicator of Economic Activity (IGAE) said the level of activity remained under pre-pandemic levels.


Moody’s Analytics expects much from Mexico. The international rating agency said that Mexico’s GDP recovery could reach 7.5% in 2021, driven by US growth (El Financiero – Spanish). Considering the historic elasticity of the 2009 and 2020 crises, and a forecasted economic growth of 4% for the US, Mexico’s economy will grow 6%.


The IMF improved Mexico’s GDP forecast. According to the International Monetary Fund (IMF), the Mexican economy registered 4.3% growth in GDP thanks to foreign demand and US exports (El Economista – Spanish). The prediction is an improvement from the 3.5% forecast in October.



Legal & Regulatory


The Sener will make LP gas more expensive. The Energy Ministry’s new agreement to control hydrocarbon imports including LP gas could produce an increase in the final price. Experts forecast the increase due to the lack of competition and price control led by Pemex (El Norte – Spanish).


The CRE okayed Pemex’s power generation permit. The Energy Regulatory Commission (CRE) granted Pemex Exploración y Producción a permit for the Plataforma Habitacional Litoral A2 plant located in Tabasco, powered up with diesel, that will have a 1.3MW capacity (Forbes – Spanish).


Gas station owners said 400 permits are halted. According to the National Organization of Oil Vendors (Onexpo), the inactivity of the Energy Regulatory Commission (CRE) has stopped approximately 400 permits for new gas stations or brand changes (El Norte – Spanish).


IMCO has some advice for CFE’s business. The Mexican Institute of Competitiveness (IMCO) recommended the state-owned company reactivate long-term power auctions (El Economista – Spanish). The auctions would allow CFE to access renewable energy at lower costs.


The Supreme Court put off the decision on AMLO’s energy policy. The Supreme Court postponed the decision of a constitutional controversy against the power sector policy (El Economista – Spanish). The new policy modified the rules over who can generate power.



Market Trends


Foreign investment dropped globally, but less so in Mexico. The COVID-19 pandemic reduced direct foreign investment by 42% at a global level. Mexico’s direct foreign investment fell 8%, placing the country among the least affected nations (El Financiero – Spanish).


Pemex crude production fell 0.8% in 2020. According to the National Hydrocarbons Commission (CNH), in 2020, oil production in Mexico dropped 0.8% compared to 2019 (El Financiero – Spanish). Pemex’s CEO expected to close 2020 with a production of 1.9 million daily barrels.


The Cenace published the operation tariffs. The National Center of Energy Control (Cenace) published the operation tariffs to be applied for the period between January 1 and December 31, 2021. Generator tariffs were set at 3.2864MXN/MWh and charges at 8.3663MXN/MWh (DOF – Spanish).


Pemex’s gasoline production was at 1993 levels. The state-owned company’s gasoline production in 2020 was the lowest since Pemex has had refining infrastructure (1993), reaching a volume of 185,600 daily barrels, down 9% compared to the previous year (El Economista – Spanish).


Experts forecast natural gas growth. According to industry participants, natural gas in Mexico continues to be underutilized, as the number of residential users has hardly budged over the last year and only reaches 7% of the population (Natural Gas Intel – English).



Strategy & Operations


The CFE will bet on power generation… The state-owned company will invest MXN281.1bn in the next five years. Almost half of the investment (45.2%) will go to power generation, while 23.5% will be directed to distribution and 22.7% to transmission (El Financiero – Spanish).


…but renewable plants would not get a dime. The state-owned company presented its business plan for 2021-2025, where no investments will go to renewable energy plants during the López Obrador administration (Forbes – Spanish). The plants that will be built and operated are six gas and steam combined-cycle plants and two turbogas plants.


Eight gas stations will be visited by the National Guard. The head of the Federal Prosecutor for Consumers (Profeco) said the National Guard will visit eight gas stations in the country that did not allow verification (El Financiero – Spanish). The gas stations are located in Puebla, Quintana Roo, Jalisco, Estado de México, Morelos, and Chiapas.


Gas stations will invest big to improve. In 2021, gas stations in Mexico will invest MXN12bn to improve the client experience, as installations will be updated and they will offer training to workers (El Financiero – Spanish). In 2020, investments in gas stations reached MXN20bn.



Old School Social Goes Viral


(Editor’s note: For the duration of the COVID-19 outbreak, this section will refocus on announcements of event delays or cancellations, events that are moved online, and scheduled webinars and public conference calls. Stay safe!)



2nd Edition of Shallow and Deepwater Mexico was postponed to February 16-18, 2021, at Ciudad del Carmen, Campeche.


Mexico Assembly is rescheduled for May 26-27, 2021, at Hyatt Regency, in Mexico City.


The Mexican Petroleum Congress is rescheduled for June 23-26, 2021, in Monterrey.



Lateral Thinking


Mexico may turn to Jatropha curcas for fuel. Mexico could use Jatropha curcas as an excelled feedstock for diesel; Ricinus, better known as castor bean, as an ingredient in world famous Castrol premium motor oil; and sugar cane-based ethanol, which is 10 times as profitable as corn-based ethanol (Mexico News Daily – English).


Quote of the Week


“Para hablar de los hombres grandes se debe hablar, urge hablar con frase clara y sencilla, como clara y sencilla fue la vida de esos hombres.”


“To speak of great men we should talk, we must talk with clear and simple phrases, as clear and simple was the life of those men.”



– Antonio Díaz Soto y Gama (1880-1967), Mexican revolutionary during the Mexican Revolution and Mexican politician.



We hope you have a productive week. Please send any news, comments, or biofuel ideas to


Tell your friends and colleagues about the Weekly Brief! They can sign up for a free one-month trial here.[/vc_column_text][/vc_column][/vc_row]