San Antonio-based refiner Valero to spend $200M in Mexico

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May 25, 2017 Updated: May 25, 2017 4:10pm

From: Express News

By Rye Druzin rdruzin@express-news.net @druz_journo

“Investors at an energy expo in Mexico City last week got a sneak peek at San Antonio-based Valero Energy Corp.’s plans to spend $200 million building new fuel storage across the border.”

“Valero executives at the Onexpo conference May 17-19 said their investment would pay for 1.6 million barrels of storage in three locations. The largest terminal would store 925,000 barrels in the Gulf Coast city of Altamira in Mexico’s Tamaulipas state and would supply refined fuels into Mexico, according to reporting by Mexican newspaper Milenio.”

““Valero representatives recently met with potential clients about proposed plans to distribute Valero-branded fuels in Mexico,” Valero spokeswoman Lillian Riojas said in an email. “The plans are in the works and continue to evolve as we hone our strategy to further serve the Mexico market.””

“Valero will also build a 325,000-barrel terminal in Monterrey and one in San Luis Potosi. The largest U.S. refiner will also allow its brand to be licensed by Mexican gas station owners.”

“Official’s with Energy Regulation Commission confirmed that Valero has applied for a permit to sell gasoline in Mexico, but said no further details were available.”

“The announcement comes after San Antonio-based refiner Tesoro Corp. was given the first ever contract to lease storage and pipeline capacity in northwestern Mexico from Mexico’s state-run oil and gas company Pemex. Tesoro will supply gasoline and diesel into the region, which Tesoro’s President and CEO Greg Goff estimated had a daily deficit of 150,000 barrels of refined fuels.”

“Mexico has faced fuel shortages and rising prices since the government announced in 2013 its intention to open its state-controlled energy sector to competition after nearly 80 years.”

“Valero’s investment came the same week Exxon Mobil said it will invest $300 million into fuel infrastructure and gas stations in Mexico over 10 years. British Petroleum or BP announced plans to establish 1,500 BP-branded gas stations across Mexico over five years, and other oil and gas companies have made announcements that they are entering Mexico’s fuels market.”

Grupo México proyecta invertir en energía

rdruzin@express-news.net

@druz_journo

BP sees early promise, growing investment in Mexico energy

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Wed May 17, 2017 | 1:15pm EDT

REUTERS   By David Alire Garcia

“BP Plc’s first foray into Mexico’s recently opened energy market is proving more promising than expected, and the government should offer more big projects to lure investment, the British oil major’s Mexico boss said in an interview.”

“Chris Sladen, country manager for Mexico, said BP expects to increase investment in everything from exploration to retail fuel sales, and looks forward to partnering with state oil company Pemex [PEMX.UL] after losing an early chance for a lucrative tie-up.”

“Mexico wants to attract major investors to reverse years of declining crude output and rising dependence on U.S. natural gas and fuel imports.”

“”To turn that ship around, you need a substantial number of large projects,” Sladen said at BP headquarters in Mexico City on Tuesday. “I would encourage Mexico to offer substantial numbers of large projects because that’s what it takes.””

“BP and others are expanding their presence in Mexico after a 2013 energy overhaul ended Pemex’s decades-long monopoly.”

“”The British firm is already involved in three offshore projects, two in the Gulf of Mexico’s deep waters and another in shallow waters. Sladen said initial company investment in all three could total many hundreds of millions of dollars.”

“”That investment would grow significantly, he added, if the projects are successful.”

“In 2015, Argentina-based Pan American Energy LLC [BPPAE.UL], which is 60 percent BP-owned, won the rights to develop the Hokchi field in the Gulf’s shallow waters.”

“Sladen said three of four committed exploration and appraisal wells have already been drilled there, and early data is promising.”

“”The initial results have suggested that the reservoir volume might be slightly higher than initially modeled. Perhaps it’s 20 percent higher,” he said.”

“During the auction for the Hokchi field, Mexico’s oil regulator estimated that the 15 square mile (40 sq km) area contained 334 million barrels in remaining oil resources.”

“At current prices for Mexico’s crude exports at around $46 per barrel, a 20 percent larger reservoir volume would mean more than $3 billion in additional value from nearly 67 million additional barrels.”

“Sladen said that data from the Hokchi wells is still being analyzed, and while the drilling program should be completed later this year, investment decisions are still “some months away.””

“Late last year, BP partnered with Norway’s Statoil [STLBR.UL] and France’s Total SA to win development rights for two deep water blocks in the southern Gulf of Mexico’s Salina basin.”

“Exploration plans for each of the blocks will be submitted to regulators by September, Sladen said.”

“While each of the three companies in the consortium has a one-third stake in both blocks, Statoil is the operator, responsible for development.”

“BP has maintained a presence in Latin America’s second-biggest economy dating back to the 1960s, and Sladen has been country manager since 2007.”

“The company narrowly lost out in December to Australian mining and oil giant BHP Billiton in its bid to partner with Pemex on its Trion deep water project, but Sladen still expects to tie up with Mexico’s former oil monopoly.”

“”I see a future of us co-investing with Pemex on major projects,” he said, without going into further detail.”

“BP is still evaluating a range of projects at oil auctions scheduled for later this year, as well as possible investments in ports or storage facilities needed to import fuel, he added.”

“The company has created hundreds of local jobs with hundreds more likely in the near future as it cements its status as Mexico’s first-ever integrated international oil firm, he said.”

“Beyond the three offshore projects, BP has recently won so-called open season rights to surplus capacity on some natural gas pipelines owned by Pemex, Sladen noted.”

“The company also launched Mexico’s first foreign-branded gas station, with plans to open some 1,500 stations over five years. Sladen said that by the end of this year BP could open 200 gas stations.”

“The first station, which opened in March just outside Mexico City, has already become one of the country’s top three retail sellers by volume, he added.”

“There are about 11,400 gas stations in Mexico.””

shutterstock_393410101

Wed May 17, 2017 | 1:15pm EDT

Shell company to open its first gas station this year in Mexico

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By Roberto Noguez Noguez

Mexico, May 18 (Notimex) .

“The Anglo-Dutch Shell will open its first service stations in Mexico this year with the goal of being one of the three most important players in the sector, and not rule out in the future participation in development Of infrastructure.”

“Downstream director of the company, Andrés Cavallari, said in an interview with Notimex that the country was always in its aspiration, but there was an inability to operate, but almost a year and a half ago they started working on it.”

“”Mexico is a very important market in the gasoline business, it is the fifth largest consumer in the world and it is a market that grows year after year and it will continue in the coming decades,” he said.”

“According to the manager, they expect to open stations this year, in the downtown area, with the aim of having a relevant presence in the Mexican market under the scheme of own stations and franchises.”

“He stressed that they are a company that “is always on the podium”, so they will seek to be a relevant player with a long-term view, to be the “top three” among players, as in other parts of the world.”

“Regarding the origin of the molecule that they will sell in their stations, he explained that in the beginning they will buy it from Pemex and add an additive to offer their product V-Power.”

“”In the short term, the plan is to buy fuel in the local market and add additives, since the gasolines of the country are very good, because the Mexican Standard is very strict,” said Cavallari.”

“The manager of Shell Mexico commented that they will participate in the open seasons to have capacity of transport in the infrastructure.”

“”In the medium term, when we have access to part of the existing infrastructure in the open seasons or in the future we will participate in infrastructure development, which is what the country needs at this moment, we will be able to bring our own molecule,” he stressed.”

“He added that one of their offers is to provide the best experience, with the best quality gasoline and point of sale service, fast transactions, and consumer loyalty programs.”

NTX/RNN/NMR/DVMC
FROM: http://www.notimex.gob.mx/ntxnotaLibre/353544

Wall St. rises as oil price jump boosts energy shares

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Tanya Agrawal

 “U.S. stocks opened higher on Monday as a rise in oil prices boosted energy stocks, soothing some nerves following a massive cyber attack that locked up 200,000 computers in more than 150 countries.

Oil hit a three-week high after top exporters Saudi Arabia and Russia said supply cuts needed to last into 2018, a step toward extending an OPEC-led deal to support prices for longer than originally agreed.

Shares of oil majors Exxon (XOM.N) and Chevron (CVX.N) rose in early trading.

“On the one hand, this is good news because we are looking at a situation where we would not have to worry oil production and its baggage for some time,” said Naeem Aslam, chief market analyst at Think Markets UK Ltd.

“On the negative side, we think that traders are reading too much into this situation and … the current production cut has not been able to produce any substantial results so far.”

At 9:34 a.m. ET (1334 GMT), the Dow Jones Industrial Average .DJI was up 60.64 points, or 0.29 percent, at 20,957.25, the S&P 500 .SPX was up 5.95 points, or 0.24 percent, at 2,396.85 and the Nasdaq Composite .IXIC was up 11.74 points, or 0.19 percent, at 6,132.97.

Ten of the 11 major S&P 500 sectors were higher, with the energy index’s .SPNY 1.29 percent rise leading the advancers.

Investors seemed to mostly shrug off fears from a successful missile test by North Korea and a cyberattack that disrupted operations at car factories, hospitals, shops and schools.

Shares of cybersecurity firms such as Fireye (FEYE.O), Symantec (SYMC.O), Palo Alto Networks (PANW.N) and Cyberark Software (CYBR.O) were all up.

U.S. stocks slipped on Friday, ending the week lower as tepid economic data weighed on banks and worries deepened over department stores.

Soft retail sales and monthly inflation data on Friday raised concerns about slow economic growth.

The tepid economic data comes on the heels of a strong quarterly earnings season. Earnings at S&P 500 companies are expected to have grown 14.5 percent in the first quarter – the best showing since 2011, according to Thomson Reuters I/B/E/S.

The NAHB Housing Market Index for May, is expected to remain unchanged at 68 from the month before. The data is expected at 10 a.m. ET.

Tesla (TSLA.O) was down 3.6 percent at $313.30 after Morgan Stanley downgraded its rating on the electric-car maker’s stock.

Patheon NV (PTHN.N) soared 33 percent to $34.59 after Thermo Fisher Scientific (TMO.N) said it would buy Dutch drug ingredients maker for about $5.2 billion.

Advancing issues outnumbered decliners on the NYSE by 1,927 to 597. On the Nasdaq, 1,556 issues rose and 664 fell.

The S&P 500 index showed nine new 52-week highs and four new lows, while the Nasdaq recorded 44 new highs and nine new lows.”

Mon May 15, 2017 | 9:54am EDT

REUTERS

Exxon, Petrobras Said to Have Discussed Strategic Partnership

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Sabrina Valle

“Exxon Mobil Corp. and Petrobras have held talks on a strategic partnership that could involve multiple assets in Brazil and overseas in different segments of the industry, similar to the $2.2 billion deal signed with Total SA in December, said people familiar with the conversations.

Such a deal could give Exxon access to oil fields and infrastructure in Brazil while state-controlled Petroleo Brasileiro SA could gain from Exxon’s expertise in production, refining and distribution, the people said. The company clarified in a statement Tuesday that there is no ongoing negotiation aiming at a strategic alliance with Exxon.

“Petrobras stresses, however, that it’s constantly in touch with companies in the oil and gas sector to evaluate opportunities and share experience,” the company said in the statement.

International oil companies are taking a closer look after Brazil eased nationalist regulations and opened the market to more competition. Carla Lacerda, Exxon’s country chief, said earlier this month that the U.S.-based oil giant sees great opportunities in Brazil. Last week, Petrobras Chief Executive Officer Pedro Parente met in Houston with both Lacerda and BP Plc’s head of Latin America, Felipe Arbelaez, the people said, asking not to be named because the discussions were private.

Arbelaez confirmed that he and Parente had talked in “a number of meetings.” He said that with the policy changes being undertaken by Brazil’s government, “all companies are reviewing their Brazil strategy.”

Lauren Kerr, an Exxon spokeswoman, declined to comment. “As a matter of practice we don’t comment on rumors or speculation,” she said.

In December, France-based Total agreed to buy stakes in Brazilian oil fields and energy infrastructure in a $2.2 billion deal that is expanding its presence in Latin America’s largest economy.

Total’s Deal

That agreement included stakes in the Iara and Lapa offshore prospects, and gives Petrobras the option to buy into a field in the Gulf of Mexico, the Rio de Janeiro-based company said at the time. Total also acquired 50 percent of two thermoelectric plants in the Bahia area and the right to use a regasification unit in the city. It may study more purchases from Petrobras, Total Chief Executive Officer Patrick Pouyanne said when the deal was announced.

Other European oil producers have also moved to grab a share of the deep-water discoveries that are driving Brazil’s production growth. Statoil ASA bought Petrobras’s stake in the Carcara find last year in a $2.5 billion deal, and Royal Dutch Shell Plc expanded in the pre-salt region through its acquisition of BG Group Ltd.

In recent months Michel Temer’s government has removed Petrobras’ exclusivity to operate in the pre-salt, and eased buy-in-Brazil requirements for platforms and equipment. Only one pre-salt field, the giant Libra discovery, has been auctioned in this decade, and under terms that guaranteed Petroleo Brasileiro SA, as it is formally known, control of operations.

While single wells in the pre-salt region can produce more than 40,000 barrels a day, among the most productive in the world, Exxon previously had a rare case of exploration failure in at a concession it abandoned in 2012.

“We are here to say we are going to try again,” Lacerda said at an event in Houston last week. “Exxon Mobil sees great opportunities in Brazil.”

9 de mayo de 2017 12:43 GMT-5 9 de mayo de 2017 23:01 GMT-5

Bloomberg

Exxon

Mexico’s Pemex says March crude oil exports hit record low

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Reporting by David Alire Garcia; Editing by Andrew Hay

“May 5 Mexican national oil company Pemex said on Friday that March crude exports fell to a record low of just above 1 million barrels per day (bpd), while oil output for the month also dipped.

Pemex’s March crude shipments averaged 1.001 million bpd, the lowest level of monthly exports going back to at least 1990 when records began. March exports were down nearly 6 percent compared with the same month last year.

Meanwhile, crude production during the month fell 9 percent to average 2.018 million bpd.

Pemex’s oil output hit a peak of 3.38 million bpd in 2004, but since then has steadily declined.

A four-year-old energy overhaul that ended Pemex’s decades-long monopoly on production led to the first-ever competitive oil auctions and joint venture partnerships, but fresh output streams from new entrants in the market are not expected for several years.

On Wednesday, despite lower oil production, Pemex reported its first quarterly profit in five years on higher sales and rising prices, gaining some $4.7 billion during the January-March period.”

Fri May 5, 2017 | 1:33pm EDT

REUTERS

Pemex Likely to Return Very Small Amount of Fields to State: CEO

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By Adam Williams and Lucia Kassai

“Petroleos Mexicanos plans to develop most of the 120 oilfields the government granted the state-owned company, returning “only a very low percentage,” according to the company’s chief executive officer.

The production regions were given to Pemex, as the company is known, when Mexico’s oil industry opened to private competition in 2014. Pemex had three years to invest in the fields or return them to the regulator to be auctioned in future bidding rounds.

As the three-year deadline nears, Pemex is likely to maintain the majority of these fields, Jose Antonio Gonzalez Anaya, the company’s CEO, said in a Bloomberg Television interview from Houston.

“We are trying to make progress to make sure we meet the regulator’s requirements, especially the ones where we know there is oil and where there is production,” he said. “I think we will develop the fields that have been assigned to us.”

Appointed as Pemex’s CEO last year, Gonzalez Anaya’s impact on the company’s ailing financial standing has been immediate. After four years of losses, Pemex yesterday reported first-quarter earnings of 87.9 billion pesos ($4.6 billion).

“The last time we posted a profit the price of oil was $100 per barrel. To post a profitable result when the price of oil is around $40 is important,” Gonzalez Anaya said. “This is no small achievement.”

Production Growth

Pemex, which has seen oil output fall every year since 2004, hopes production will stabilize this year and possibly increase as soon as 2018, he said. In addition to joint ventures planned in onshore, shallow and deep waters fields, Pemex is also looking to “cluster small allocations and small fields so that we can migrate them together,” he said.

The company is counting on a recently implemented oil price hedge — independent of the Mexican government’s hedging program — to give Pemex “some degree of certainty to our investment and to our planning,” Gonzalez Anaya said. Pemex, which hadn’t hedged independently from the government in 11 years, will likely use the tool again next year, he said.

Pemex will also seek additional hydrogen unit joint ventures at its refineries, similar to the partnership signed with Air Liquide SA in February at the Tula refinery, he said.

“This model will be replicated for other refineries, and I think things will run much better,” Gonzalez Anaya said of the additional partnerships planned for refineries.”

4 de mayo de 2017 13:04 GMT-5

Bloomberg

Oil Rises From One-Month Low Before U.S. Crude Inventory Data

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by Grant Smith

“Oil rose from its lowest close in a month amid estimates that U.S. crude inventories continue to shrink, although refined products are growing more plentiful.

Futures gained as much as 0.9 percent in New York after dropping 1 percent Monday. U.S. crude stockpiles are forecast to have decreased for a fourth week from a record last month, according to a Bloomberg survey before a report from the Energy Information Administration on Wednesday. Meanwhile, U.S. gasoline and distillate inventories probably climbed last week. The industry-funded American Petroleum Institute will release its supply data on Tuesday.

Oil has fallen the past two weeks on concerns increasing U.S. crude production will offset efforts by the Organization of Petroleum Exporting Countries and its allies to eliminate a global supply glut. While Fereidun Fesharaki, the head of industry consultant FGE, says OPEC is certain to extend output cuts when its ministers meet later in May, industry data showed American rigs targeting crude climbed to the highest level in two years.

“Everyone is waiting for the oil-inventory drawdowns materializing as a result of the OPEC and non-OPEC cuts,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.

West Texas Intermediate for June delivery increased 38 cents to $49.22 a barrel on the New York Mercantile Exchange at 12:15 p.m. London time. Futures fell 49 cents to $48.84 on Monday, the lowest settlement since March 28. Total volume traded was about 16 percent above the 100-day average.

U.S. Fuels

Brent for July settlement rose 54 cents to $52.06 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 53 cents to settle at $51.52 a barrel on Monday. The global benchmark crude traded at a $2.52 premium to July WTI.

Supplies of gasoline probably rose 1 million barrels to 242 million and inventories of distillate fuel, a category that includes diesel and heating oil, surged 1.5 million barrels to 152.4 million last week, according to a Bloomberg survey of eight analysts. Nationwide crude stockpiles are forecast to have dropped by 3.25 million to 525.5 million barrels in the week ended April 28.”

1 de mayo de 2017 19:15 GMT-5

Bloomberg

11 Octubre_shutterstock_393692620

OPEC May Need to Extend Production Cuts to End of Next Year

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By Anthony Dipaola

“OPEC is certain to extend cuts in oil output when its ministers meet later in May and will need to keep limiting production until as late as the end of 2018, a veteran market analyst said.

The reaction of global crude inventories to the cuts will determine how long the Organization of Petroleum Exporting Countries and allied producers stick with their policy of pumping less oil to counter a global glut, said Fereidun Fesharaki, the head of industry consultant FGE. Oil may drop to as low as $40 a barrel if U.S. stockpiles increase, he said Monday at the Middle East Petroleum and Gas Conference in Dubai.

“The probability that OPEC will agree to extend its cuts is at 100 percent,” said Fesharaki, a former adviser in the late 1970’s to the Iranian Prime Minister. “And the cuts will have to be extended even beyond this year, to the middle or even to the end of next year.”

OPEC and 11 other producers including Russia agreed in December to pare production by 1.8 million barrels a day during the first half of this year. They’re seeking to eliminate an oversupply that depressed prices to less than half of their 2014 high, when benchmark Brent crude sold at $115 a barrel. Brent jumped 52 percent last year for the first annual gain after three consecutive decreases and was trading at $51.65 a barrel, down 40 cents, at 5:18 p.m. in Dubai.

The oil market needs more time to start using up stored inventories, which are on the verge of declining, Harold Hamm, chief executive officer of Oklahoma-based Continental Resources Inc., said at the same conference. U.S. oil output is poised to expand this year by at least 400,000 barrels a day, most of it from the Permian Basin, to a level of about 9.4 million barrels a day, he said.

OPEC plans to decide on May 25 at a meeting in Vienna whether to extend its production limits. There’s a consensus that the group will extend the cuts into the second half, Saudi Arabian Minister of Energy and Industry Khalid Al-Falih said last week.”

1 de mayo de 2017 6:33 GMT-5

Bloomberg