The Weekly Brief: Mexico


January 28, 2019 edition—Avant Energy’s solar; Jaguar’s oil exploration; and a lower growth outlook.




Last Week in a Minute or Less


Renewables & Electricity. Avant Energy goes solar in central Mexico; Gerdau Corsa and Engie partnered up; and Monterrey will power up with trash.


Natural Gas & Liquid Fuels. The Sener will control Pemex’s gasoline distribution; the Cadereyta refinery will be updated; and natural gas infrastructure is needed.


Oil & Gas Upstream. The CNH okayed Jaguar’s exploration; and oil companies will boost production.


Money & Power. The US government shutdown may delay USMCA approval; the CRE personnel keeps changing; and the IMF cut Mexico’s growth outlook.


Déjà vu all over again. Last week’s readers were particularly interested in Pemex’s exploration contracts (El Financiero – Spanish); solar energy investments (El Economista – Spanish); and Banxico’s worries on fuel shortages (El Economista – Spanish).



NAFTA Negotiation


Canada’s ambassador trusts the USMCA will be approved… David MacNaughton, Canada’s ambassador to Washington, trusts the US will pass the USMCA and end the tariffs on steel and aluminum. The ambassador said that there are no negotiations going on to resolve the tariff dispute (Bloomberg – English), but the Canadian government keeps pressuring the US.


…but the US government shutdown may delay it. The partial shutdown of the US government could delay the vote to approve the USMCA. The US International Trade Commission started research to study the economic impact of the USMCA on October 12 and has 105 days to publish it (El Economista – Spanish).


Lobbyists go all in with USMCA uncertainty and tariffs. American companies and business groups expect a complicated 2019 as the trade conflict continues and the NAFTA renegotiation is pending in Congress (Bloomberg – English). NAFTA and the duties on steel and aluminum were key targets of lobbying in the final three months of 2018.



The Road to Reform


The Sener will control Pemex’s gasoline distribution. To fight fuel theft, the new administration plans for the Energy Ministry to control the pipeline network through the Logistic Center for Fuels Distribution and Transportation (El Economista – Spanish). The National Commission of Regulatory Improvement is being questioned on the creation of the center.


Infrastructure for natural gas is needed. The Mexican Energy Association and Iberdrola warned that Mexico needs new infrastructure in generation, transmission, and distribution of natural gas to avoid a collapse in natural gas demand (El Economista – Spanish). Reserves have decreased every year and are reaching worrisome levels.


The CRE had a busy week. The Energy Regulatory Commission published the Official Norm NOM-017-CRE-2018 to estimate the percentage of power free of fuel (DOF – Spanish). The CRE also published the rules on transportation and distribution of LP gas (DOF – Spanish).


The CNH okayed Jaguar’s exploration plan. The National Hydrocarbons Commission (CNH) approved Jaguar Exploración y Producción for the evaluation and exploration plan for five oil wells in Veracruz (El Financiero – Spanish). The plan is expected to require approximately US$33m in investment.


The CRE personnel keeps changing. A commissioner of the Energy Regulatory Commission (CRE), Montserrat Ramiro, announced her resignation after February 15 (El Financiero – Spanish). The new administration needs to cover five vacancies in the two regulatory agencies (El Financiero – Spanish).



Political Economy


Mexican officials fight with Congress over their testimony. The Congress demanded the presence of the Energy Minister and the Finance Minister to explain the causes and effects of the fuel shortage (El Financiero – Spanish). The top officials were previously asked by lawmakers to attend a congressional committee (Reuters – English).


A coal power plant will be delayed. The Senate’s Energy Commission confirmed the coal power plant is still a plan. However, the construction of the plant will not start this year due to the lack of a budget (El Financiero – Spanish).


The IMF cut Mexico’s growth outlook. The International Monetary Fund lowered Mexico’s growth outlook for 2019 to 2.1%, below the previous outlook of 2.5% (El Economista – Spanish). The IMF argued that the new administration’s economic policy generates uncertainty (El Economista – Spanish).


The death toll in the Hidalgo pipeline blast increased to 114. Government officials announced that the number of people who died in the pipeline explosion increased to 114 (Global News – English) (El Financiero – Spanish).



Market Trends


CFE Transmisión published its new tariffs. CFE Transmisión published the tariffs that will be applied for the public service of power energy transmission from January 1, 2019 (DOF – Spanish). The tariff for generators applies to all the generators participating in the Wholesale Electricity Market.


Fuel inventories increased thanks to the fight against fuel theft. Fuel continues to build up at Mexico’s ports and storage terminals, according to Pemex (Reuters – English). The government is working to accelerate deliveries to gas stations via truck.


The Yucatán peninsula is running out of gas. Saavi Energía demands the end to the natural gas deficit to produce power energy in Yucatán. Saavi Energía is building combined cycle plants in Mérida and Campeche powered by natural gas to produce cheaper energy (El Economista – Spanish).


Oil companies pledge to increase investment. After President López Obrador’s previous accusations of low investments in oil contracts, oil company representatives met the president and promised to speed up investments and work with the Energy Ministry (Forbes – Spanish). Canadian companies trust the new government will respect the investments, and their operations will expand (El Economista – Spanish).



Strategy & Operations


Avant Energy goes for solar in central Mexico. The company is planning to include solar energy projects estimated at US$200m in Mexico’s central region. The projects will total 200MW, and Avant Energy plans a storage terminal in Monterrey (El Financiero – Spanish).


The Cadereyta refinery will be updated. The Energy Minister started the rehabilitation of the Cadereyta refinery, where MXN4.5bn will be invested (El Economista – Spanish). The Cadereyta plant has the capacity to produce 260,000 barrels of refined products per day, and today the plant produces 115,000 barrels.


Monterrey will power up with trash. The Nuevo León government will offer a tender to construct a waste incinerator in Simeprode to generate power for Monterrey’s water, drainage, and subway systems (El Financiero – Spanish). The biogas plants produce 12.5MW, a small share of the 150MW needed by the government.


Oil companies will boost production. Oil companies pledged to cover the production goals set for private companies in a meeting with President López Obrador (Reforma – Spanish). The companies will produce 280,000 barrels per day by the end of the term.


Gerdau Corsa and Engie partnered up. Gerdau Corsa signed an agreement with Engie for 15 years to acquire 100% of the energy generated in a solar plant in Sonora for its Tutitlán plant in Estado de México (El Financiero – Spanish). Engie invested US$11m to build the solar park.



Old School Social


Events in the world beyond your screen—go see and be seen!


OMC 2019 is scheduled for January 28 at the NH Collection Mexico City Airport T2 in Mexico City.


Energy Mexico 2019 will be held January 29-31 at Centro Cultural Banamex in Mexico City.


MIREC WEEK is hosting a breakfast to discuss the impact of the new administration’s policies in renewables, scheduled for February 6 at the Sheraton María Isabel in Mexico City.


Mexico WindPower will be held March 20-21 at Centro Cultural Banamex in Mexico City. Mexico WindPower is the premier wind energy event in Mexico, with eight consecutive years showcasing the latest in innovations and technology for leading national and international decision-makers.



Lateral Thinking


A student is comparing Mexico’s wild species and cultivated crops. The University of Vermont was the first to offer undergraduate and postgraduate programs in Food Systems. A PhD student in plant and social science, Jorge Ruiz-Arocho, is working in Mexico comparing agrobiodiversity, because “Mexico is region of origin of many crops, such as corn, beans, squash, and chili” (English).



Quote of the Week


“La arquitectura ya no es moda, convirtiéndose en una prolongación creative original de la tradición del país donde se hace.”


“Architecture is no longer fashion, it has turned into a creative prolongation of the country’s tradition where it is made.”


– Juan O’Gorman (1905-1982), Mexican painter and architect.



We hope you have a productive week. Please send any news, comments, or studies on Mexican crops to


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