February 27, 2017 edition— Pipeline capacity winners announced; Carstens stays on until November; and NAFTA 2.0 by June.
Last Week in a Minute or Less
Renewables & Electricity. Grupo México is interested in three solar plants.
Natural Gas & Liquid Fuels. Cenagas disclosed the three winners of the pipeline capacity auction; ONEXPO wishes for better fuel logistics; and Mexico’s dependency on US natural gas will grow.
Oil & Gas Upstream. The CNH denied Renaissance Oil’s request for a work stoppage; Chiapas indigenous communities are discussing the development of two onshore fields; and the ASF found anomalies in Round 1.
Money & Power. Carstens postpones his departure until November; NAFTA’s renegotiation is scheduled for June; and Mexico and Canada’s representatives met to discuss migration.
Déjà vu all over again. Last week’s readers were particularly interested in the third auction’s calendar (Spanish); ATCO’s problems with the Tula pipeline (Spanish); and Tillerson and Kelly’s visit (English).
The Road to Reform
Three winners in the auction for natural gas import capacity. Cenagas announced BP, Fábrica de Envases de Vidrio del Potosí, and Industria del Álcali won the first auction reserving natural gas pipeline capacity (English) (Spanish). BP Energía México was assigned 190,000 MMBtu/d on the EFM-Nueces pipeline and 10,000 MMBtu/d on the DCP-Gulf Plains pipeline (Spanish).
The ASF noticed anomalies in Round 1. The Superior Auditor of the Federation (ASF) reported anomalies in the first three tenders in Round 1. The National Hydrocarbons Commission (CNH) allowed two companies to hire the same law firm, a practice that does not contradict the rules of anti-trust agency Cofece (Spanish).
The new era of daily gasoline prices is finally here. After seven decades of fixed prices, Mexico is entering a new era of daily fluctuations on gasoline prices (Spanish). Gasoline prices will be changed on Tuesdays, Wednesdays, Thursdays and Fridays after 4 p.m. and will take effect after midnight (Spanish).
ASEA tries to make its own trust. The Agency of Energy and Environmental Security (ASEA) seeks congressional approval to create a trust, similar to that of the Energy Regulatory Commission (CRE) (Spanish). The trust would manage revenues received from payments for rights by regulated entities.
Carstens postpones his departure from Banxico until November 30. Agustín Carstens will remain as Mexico’s Central Bank chief through November and asked the Bank for International Settlements to postpone his appointment as its head (English) (Spanish). In the meantime, analysts point to Alejandro Díaz de León and Alejandro Werner as possible successors (Spanish).
NAFTA renegotiation is expected for June. Mexico’s Foreign Relations Minister, Luis Videgaray, announced the renegotiation of NAFTA will take place around June (Spanish). Videgaray said the terms for environmental protection, intellectual property, and labor rights and safety can be modernized but Mexico will not accept tariffs or quotas on exports.
Pemex lost MXN62bn in 2016. The gasoline price scheme set by the Finance Ministry caused a MXN61.5bn loss for the state-owned company in 2016, according to Reforma newspaper calculations. Pemex was forced to sell imported fuels below real costs, although Pemex may have profited on gasoline and diesel refined in Mexico (Spanish).
Border tax may harm US-Mexico energy trade. Mexico’s Deputy Energy Minister for Hydrocarbons, Aldo Flores, asserts that President Donald Trump’s border tax is “not a good idea” (English). Flores considers that free trade and the free flow of energy benefit both countries and strengthen their mutual energy security.
Mexico and Canada discuss migration and economy. Mexico’s Foreign Relations Minister and Economy Minister met with Canada’s Foreign Relations Minister to discuss strategies to make the middle class grow in both countries and examine immigration issues (Spanish). The three representatives agreed to keep working on strengthening bilateral relations.
In its sixth edition, MEXICO WINDPOWER 2017 has emerged as the most important international business summit of renewable energies in our country, proving to be the only event of its kind with significant and steady growth.
WHEN: Wednesday and Thursday, March 1 – 2, 2017.
WHERE: Centro Citibanamex, Mexico City
Mexico’s GDP exceeded expectations. According to the National Institute of Statistics and Geography (INEGI), Mexico’s Gross Domestic Product rose 2.4% during the last quarter of 2016 compared to the same period in 2015 (Spanish). Mexico’s economy slowed in the last quarter after primary activities dropped and growth in services slumped.
The peso strengthened after Banxico offered US$20bn in currency hedges. Mexico’s central bank announced the offer of US$20bn in currency hedges, signaling an important change in the approach to FX policy (English) (Spanish). After the news, Mexico’s peso jumped 1.8 percent, a level not seen since Trump’s victory.
The NAFTA renegotiation is a nightmare for Mexico’s border factories. US textiles manufacturers, including MFI International, have operated on both sides of the border and worry about President Trump’s renegotiation or possible withdrawal from NAFTA (English). Retail companies argue that ending NAFTA would not stop imports from China.
Strategy & Operations
Indigenous communities fight two onshore fields. The Tecpatan and Francisco León communities are considering granting permission to drill two onshore fields in their area (Spanish). The oil and gas development on those two fields are being discussed by the government and the Zoque community in the south of Chiapas.
Grupo México has three solar plants in sight. Grupo México (GMéxico) considers investing in three solar energy projects this year (Spanish). GMéxico expects an income from its energy unit of US$300m and an operating income of US$112m, adding to the two power plants the firm has in Sonora.
ONEXPO stresses the need for better fuel logistics. The national president of ONEXPO, José Ángel García Elizondo, worried about dependence on Pemex’s limited, obsolete, poorly maintained, and expensive logistic infrastructure (Spanish). García Elizondo said that a massive development of infrastructure is needed to transport fuel efficiently.
The CNH denied Renaissance Oil’s suspension request. The National Hydrocarbons Commission (CNH) refused grant a work stoppage for force majeure to the Canadian company’s activities at the Round 1.3 Ponton onshore field in Chiapas (Spanish). Renaissance Oil stated that a hydrocarbon spill prevents the company from fulfilling its contract.
Old School Social
Events in the world beyond your screen – go see and be seen!
The Pecom Petroleum Exhibition & Conference of Mexico is March 28-30 in Villahermosa, Tabasco.
50,000-year-old life forms were found trapped in a Mexican cave. Nasa’s Astrobiology Institute announced the discovery of 40 different stains of microbes trapped in crystals 50,000 years old located 800-metres deep in Naica, Chihuahua (English). The find exemplifies how microbes can survive extreme conditions at high temperature.
Quote of the Week
“Hay que seguir la lucha con lo que podamos hasta que podamos.”
“We have to keep fighting with what we can until we can.”
-Benito Juarez (1880-1928), Mexican politician, lawyer and President for five terms
We hope you have a productive week. Please send any news, comments, or 50,000-years-old microbes to MexicoWeekly@energynarrative.com.
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