For many years there has been discussion of “gasifiying” the energy matrix in Mexico. Through policies and market developments, there have been important gains made particularly in the usage of cleaner burning natural gas in the country’s electric sector. Related to those advances and increased consumption has been a boom in US-Mexico natural gas trade over the last several years. Mexico’s own production of natural gas has not kept up with demand, and imports from the US have made up the difference. Estimates of US natural gas deliveries to Mexico have been consistently overtaken by the spiking cross border trade. Indeed, last September the Comisión Nacional de Hidrocarburos forecasted that if current trends continue, Mexico in 2030 would import 94% of all the natural gas that it consumes. Substantially all of those imports would come from the United States.
The increasingly heavy reliance by Mexico on imported natural gas, particularly from the United States, has created a debate and discussion on the risks associated with the current market. In two papers published by the Institute of the Americas last year, John McNeece identified the key concerns as availability risk, pricing risk and political dependency risk.
Relying on data and forecasts from the US Department of Energy, the analysis shows that availability risk and pricing risk are manageable. Political dependency risk – i.e. the risk that the US President would threaten a cut-off or cutback of natural gas deliveries to pressure Mexico – is limited by US political constraints, legal restrictions and treaty obligations.
McNeece concludes that considering the benefits to Mexico of US natural gas imports, the Mexican government could reasonably conclude that the risks presented are acceptable. At the same time, if the Lopez Obrador administration seeks to increase Mexico’s own production of natural gas and reduce its dependence on imports, McNeece’s research indicates that Mexico has a reasonably secure supply of natural gas through imports while it makes the transition to increased self-sufficiency.
Join us for a webinar and discussion with John B. McNeece III, Senior Fellow at the Center for US-Mexican Studies, University of California, San Diego and Veronica Irastorza, Associate Director at NERA Economic Consulting in Mexico City and a former Deputy Secretary of Energy for Planning.
McNeece and Irastorza will share further insights from the papers and analysis on the issues of Mexico’s natural gas imports, risk management, the role of natural gas for energy self-sufficiency as well as Mexico’s broader natural gas outlook and investment environment as the new year unfolds in Mexico.
The webinar and virtual panel will be held Wednesday, February 6 at 10:00am San Diego (12:00 pm Mexico City time; GMT/UTC – 8 hours). Their formal presentation will be followed by a live Q&A session with the audience.
The administration of Andres Manuel Lopez Obrador and his energy team hit the ground running after the inauguration last December. To date, they have unveiled a series of proposals for the energy sector including a national electricity program, a national refining plan and a plan aimed at boosting oil production. The announcements underscore the longstanding overarching narrative of the new administration and their outlook for energy centered on the issue of energy self-sufficiency. But dominating headlines since we all returned from the holidays has been the government’s efforts to combat illicit fuel theft, the so-called huachicoleo.
The plans released for the nation’s energy sector suggest myriad avenues aimed at energy self-sufficiency during the sexenio. Perhaps most important are the interconnected issues of oil production, fuel imports and infrastructure. The economic and investment implications are critical to understand as well.
Join us for a lively discussion and debate with John Padilla, Managing Director, IPD Latin America and Gonzalo Monroy, Managing Director, GMEC. Padilla and Monroy will share insights and analysis on the issues of oil production, refining, fuels infrastructure and investment as the new year unfolds in Mexico.
The webinar and virtual panel will be held Thursday, January 31 at 2:00pm San Diego (4:00 pm Mexico City time; GMT/UTC – 8 hours). The session will be delivered in a discussion format and incorporating Q&A with the audience.
Five years after the energy reform, regulatory compliance remains a principal issue and challenge for industry and government alike. Upstream operators have been facing a considerable burden of compliance costs given the complexities of the Mexican regulatory framework. Also important to understand is the backdrop created by Mexico’s political transition which includes the possibility that CNH and CRE will be placed under the authority of SENER and other new challenges that will increase the industry’s compliance risk profile.
The consequences of these sources of regulatory risks may vary from
delay in permits and authorizations,
non-compliance of contractual obligations,
contractual penalties including no access to additional exploratory periods and potentially unfavorable public relations issues and media coverage.
Join us for a webinar presentation with Marco Cota, CEO of Talanza Energy, a firm dedicated to the study and analysis of energy policies and regulatory compliance in Mexico. He will share his perspectives on the main risks related to regulatory compliance for upstream operators and the current backdrop for the sector in Mexico.
The webinar will be held on Thursday, November 15 at 10:00 am San Diego (12:00 pm Mexico City time). Mr. Cota’s formal presentation will be followed by a live Q&A session with the audience.
Mexico’s Electric Sector Renewable Energy Deployment
For years leading up to the 2013/2014 structural reforms, Mexico’s electric sector faced major challenges ranging from high generation costs, a lack of investment on transmission and distribution lines and networks and limited renewable energy deployment. The challenges had important impacts on the sustainability of the nation’s power sector and Mexico’s economic competitiveness more broadly.
A significant element of the reforms was the transformation of national energy firms Pemex and CFE to state-productive companies. Additionally, the reforms threw off many of the restraints on private and international investment and, historically, established a new electric market where generation and commercialization of electricity is open to competition.
As part of the new electric market and transformation of CFE, the Ministry of Energy (SENER) published the “terms for the Strict Legal Separation of the Federal Electricity Commission” or TESLS for its acronym in Spanish. The TESLS institutes the new company’s structure, approved by the Board of CFE that prescribes the company to be divided vertically and horizontally in state productive or affiliates. In the new market structure, CFE remains as the primary retail supplier of electricity. However, as part of the reforms the company is undergoing a major overhaul and transformation into a holding company with separate generation, transmission, distribution, supply and marketing subsidiaries that operate semi-independently.
Webinar presentation with Jorge Araujo, CFE’s Director of Financed Investment Projects. He will share insights on CFE’s restructuring and transformation, and where the implementation stands today in the context of Mexico’s energy reform and electric market.
The webinar will be held Friday, July 27 at 10:00am San Diego (12:00 pm Mexico City time; GMT/UTC – 8 hours). Araujo’s formal presentation will be followed by a live Q&A session with the audience.
Data Collection and Analysis in The Oil And Gas Sector
Strategic data collection and analysis in the oil and gas sector is nothing new. For years, the industry has utilized cutting-edge data collection methods to drive critical business decisions. But today’s market demands more. Indeed, to keep ahead of the pace, and to be a leading player in the sector , oil and gas companies need to embrace the current digital revolution.
There is ample evidence to underscore that the development and implementation of a clear digital strategy is critical for long-term success. Moreover, the digitalization of business and operating models can significantly accelerate a company’s growth, providing the potential to overcome existing competitors and unlock new levels of productivity and profitability.
Webinar presentation on the digital development and implementation for the oil & gas industry featuring Walter Pesenti, Senior Vice President at Nathan Associates. The focus is on lessons learned, next steps, and building the business case for oil & gas organizations to accelerate their success through digital technology.
During the webinar, Walter Pesenti will draw from his long career advising industry clients and present the current market context and business case for embracing digital technology in the oil & gas sector. He will illustrate success factors, challenges, and routes to optimize and incorporate digital technology. He will delve into questions such as: What areas of operations is digital technology impacting the most? What is the typical value realization experienced by the industry? What are the value levers and value generation of digital technology? What are some of the “business questions” about digital asked by business leadership? Pesenti will discuss views and insights on “making digital work,” and explore the different types of behavioral changes required by corporate leaders.
The webinar will take place on Thursday, October 4 at 9:00 am San Diego (11:00 am Houston time; GMT/UTC – 8 hours). Mr. Pesenti’s formal presentation will be followed by a live Q&A session with the audience.
In addition, a white paper featuring Nathan Associates latest research on digitalization and experiences from the oil & gas sectors will be distributed to attendees at the end of the session.
A member of OPEC, Ecuador in many ways remains largely a hydrocarbons economy. The South American nation counts proven reserves of 8 billion barrels (BP 2016 estimate) and produces 517,000 barrels per day as of June 2018.
Regarding the power sector, Ecuador is known for having a robust transition system and is part of the Andean countries interconnection system or SINEA in Spanish (Sistema de Interconexión Eléctrica Andina | SINEA). The country’s electric sector is increasingly dominated by hydropower that grew from 49% to an estimated 83% last year. On the other hand, unconventional renewables remain below 2% of the country’s generation. Diversification of the energy matrix is key for countries such as Ecuador due to the seasonal nature of hydropower generation.
Under the Presidency of Lenín Moreno, Ecuador has proclaimed its interest in attracting international investment in all segments of the country’s energy and natural resources sector. Bid rounds in the oil sector are underway as are major efforts to attract a diverse range of investment in the nation’s power and mining sector.
As part of the reorientation of the Moreno´s government for the energy sector, the Ministry of Hydrocarbons, the Ministry of Electricity and Renewable Energy as well as the Ministry of Mining are undergoing a major institutional reorganization that will lead to the establishment of one Ministry of Energy and Non Renewable Natural Resources. The Minister, Mr. Carlos Pérez will lead the Ecuadorian effort in generating a dynamic sector which fosters foreign investments, environmental consciousness and transparency. Taking a pragmatic approach that benefits all stakeholders, this sector is expected to become a driving force in the development of the country, where there will be opportunities for respected partners who want to be part in the new era of energy and resources in Ecuador.
For a webinar presentation with José Antonio Cepeda from Ecuador’s Ministry of Energy and Non Renewable Natural Resources, who currently serves as advisor to the Minister, OPEC National Representative and Member of the IEF Executive Board. He will share insights on the latest policy developments, investment opportunities and sector restructuring underway.
The webinar will be held on Wednesday, September 12 at 9:00am San Diego (11:00 am Quito time; GMT/UTC – 8 hours). Mr. Cepeda’s formal presentation will be followed by a live Q&A session with the audience.