Mexican President Weighs Bids on Huge New Oil Refinery Construction

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Sputnik News / Latin America / December 10

 

MEXICO CITY (Sputnik) – Mexico’s new President Andres Manuel Lopez Obrador said on Sunday that tenders for the construction of a new large oil refinery in the country’s southeastern state of Tabasco would be announced no later than March 2019.

“The oil refinery will be built here because oil will be processed here as well, it will not be exported. This is the best site for the construction of the new refinery,” Obrador said at a ceremony of the laying of a symbolic cornerstone for the future facility as quoted by the Excelsior news portal.

The Mexican president also confirmed that the state-owned Pemex petroleum company would receive additional $3.6 billion to boost its oil production.

According to Obrador, Mexico will seek to increase oil production from the current less than 1.8 million barrels per day to 2.4 million barrels per day in 2024. The new oil refinery is expected to process 340,000 barrels of oil per day.

 

Sputnik News / Latin America / December 10

 

Relief On Horizon for Mexico Natural Gas Market, Despite Short-Term Challenges

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Natural Gas Intelligence / Andrew Baker / November 12

Mexico’s natural gas market faces multiple short-term challenges, the most urgent of which is a lack of supply to power generators, petrochemical plants, and industrial consumers in the southern and southeastern part of the country, as the state-owned oil and gas producer struggles to increase output.

Amid declining gas output by national oil company Petróleos Mexicanos (Pemex) and delays to critical midstream infrastructure that would bring abundant and inexpensive gas from Texas, consumers in southern Mexico now face the prospect of switching to more expensive fuel oil, diesel and liquid petroleum gas (LPG) in order to continue operating over the coming months.

A lack of Pemex supply and scarce available cross-border pipeline capacity for private sector gas shippers, as well as a dearth of storage capacity, are compounded by the fact that a new government will take over on Dec. 1.

However, relief appears to be on the horizon. The 2.6 Bcf/d Sur de Texas-Tuxpan marine pipeline is expected to enter operation next month or in January, with the Cempoala compressor station reversal project slated to finish in April. Both projects should provide relief to consumers in the south, the energy ministry’s general director of natural gas and petrochemicals, David Rosales, told NGI’s Mexico Gas Price Index.

While details of a planned tender to construct 45 Bcf of underground storage capacity still need to be ironed out, Rosales said the hope is for the new administration to give an order to proceed with the tender by early next year.

“I think it’s very clear for them that this is a [project] that will not cost the state, and will be paid for by the users of the gas system themselves,” Rosales said.

The incoming administration has generated unease among investors with its proposed oil policies, such as a pledge to halt crude exports and to divert Pemex investments from exploration and production to new refineries, but Rosales said a dramatic shift in course on natural gas policy is less likely. An efficiently run gas segment translates directly to cheaper electricity prices for end-users, he noted.

Recent days have also seen progress on other cross-border pipeline projects that should help meet rising demand from the power sector.

San Antonio, TX-based Mirage Energy Corp. last week said it has a memorandum of understanding (MOU) for reserved capacity on its proposed Texas-to-Mexico gas pipeline with commodities trader TrailStone NA Asset Holdings LLC.

The nonbinding MOU would allow TrailStone to purchase 150,000 MMBtu/d (146 MMcf/d) of reserved capacity for 10 years at a fixed tariff from the Banquete/Agua Dulce area in South Texas to Compressor Station 19 and Los Ramones interconnection points on the national pipeline network Sistrangas,” Mirage said. TrailStone is a partner and commercial operator in the recently commissioned Banquete header near Corpus Christi, TX.

The 42-inch diameter, bi-directional pipeline system under development would include nearly 140 miles of pipeline in Texas and about 103 miles of pipeline in Mexico. In addition to the four sections of pipelines in the two countries, Mirage said another interconnect in Falfurrias, TX, also in far South Texas, to Transcontinental Gas Pipe Line (Transco) is being considered, as is a 14-mile pipeline in Mexico known as the Storage Line that would connect the Progreso, TX, on the border to the Brasil storage field in Tamaulipas, Mexico.

Mirage expects to begin final development work on the project in December, “with a view toward receiving required United States and Mexico permits and authorizations in 3Q2019. The company has completed the necessary engineering and design of the pipeline. The alignment for the pipeline has also been substantially completed and Mirage is in the process of securing right-of-way agreements.”

Valley Crossing To Supply CFE Import Capacity

The Mirage news follows the startup of Enbridge Inc.’s Valley Crossing gas pipeline, which spans 168 miles in Texas from the Agua Dulce hub near Corpus to the Gulf of Mexico east of Brownsville.

Valley Crossing’s primary customer is Mexican state power utility Comisión Federal de Electricidad (CFE), which is undertaking a massive shift to combined-cycle gas turbines (CCGT) from fuel oil and diesel-fired power generation capacity. Mexico’s installed CCGT capacity stood at 28,084 MW at the end of 2017, a figure that is expected to double by 2032, according to the Energy Ministry’s 2018-2032 power sector development program.

“Valley Crossing is expected to account for about half of the CFE’s total import capacity,” Enbridge said last week. Transport capacity is “half the average daily production output of the entire Eagle Ford Shale basin — in fact, it’s more than 10% of the average daily production for the entire state of Texas.”

The pipeline is designed to “support Mexico’s growing electricity generation needs, as power companies like the CFE choose natural gas,” which is a “cleaner” burning fuel and more economical than imported liquefied natural gas, the Calgary-based operator said.

“Supply in Mexico continues to decline, but at the same time their demand continues to grow,” said Enbridge Executive Vice-President Bill Yardley. “And the U.S. has some of the most economical, plentiful and reliable natural gas supplies in the world.”

Valley Crossing connects to the Sur de Texas-Tuxpan pipeline, a joint venture of Sempra Energy unit Infraestructura Energética Nova and TransCanada Corp.

Fitch Bullish On Mexico Power Sector

A FitchRatings unit said last week it holds a positive outlook for Mexico’s gas-dependent electric power sector over the next 10 years, despite uncertainty over the energy and infrastructure policies of incoming President Andrés Manuel López Obrador, who is commonly known by his initials AMLO.

“We expect the Mexican power sector to register strong growth and offer investors significant opportunities over the coming decade, thanks to rising energy demand, a supportive market structure and favorable policies,” Fitch analysts said. “Our positive view for the market is premised on the expectation that AMLO will adopt a pragmatic approach and will not reverse reforms of the power sector that contribute to attracting investment in the market.”

Fitch analysts said they expect “Mexico’s total installed capacity — net of project retirements — to increase by almost 30% between 2018 and 2027, driven primarily by the development of wind, solar and thermal power projects. Moreover, we expect Mexico’s power consumption to increase by an annual average of 2.4% over the same period.”

Although wind and solar capacity is expected to increase the most on a proportional basis to current levels, conventional thermal power is seen accounting for about two-thirds of the country’s total capacity through 2026, Fitch said, citing projections from Mexican energy ministry Sener and the U.S. Energy Information Administration.

Despite the overall optimistic outlook, analysts cautioned that, “AMLO’s unorthodox approach toward decision making for the infrastructure sector could weaken private companies’ interest in investing in the market.” Fitch cited investor unease over López Obrador’s recent decision to cancel a $13 billion airport for which construction was more than 30% complete via a referendum in which only about 1.1 million of Mexico’s 129.2 million people voted.

Other risks to the power sector include López Obrador’s ability, because of the comfortable majorities held by his coalition in both of the national legislative chambers, to reverse the 2013-14 energy reform of predecessor Enrique Peña Nieto.

“AMLO has long opposed the liberalization of the Mexican energy sector, although his criticisms have mostly focused on the oil and gas industry rather than the electricity industry. A risk of changes to the power sector’s regulatory framework, however, must be taken into account.”

Fitch also cited the risk of an economic slowdown in Mexico, but noted that this risk is mitigated by the tentative agreement reached Oct. 1 by Mexico, Canada and the United States on the U.S. Mexico Canada Agreement, an updated version of the North American Free Trade Agreement. The agreement has yet to be completed.

 

Natural Gas Intelligence / Andrew Baker / November 12

 

A 14-year-long oil spill in the Gulf of Mexico could become one of the worst in U.S. history

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Tampa Bay Times / Darryl Fears / October 22

 

NEW ORLEANS — An oil spill that has been quietly leaking millions of barrels into the Gulf of Mexico has gone unplugged for so long that it now verges on becoming one of the worst offshore disasters in U.S. history.

Between 300 and 700 barrels of oil per day have been spewing from a site 12 miles off the Louisiana coast since 2004, when an oil-production platform owned by Taylor Energy sank in a mudslide triggered by Hurricane Ivan. Many of the wells have not been capped, and federal officials estimate that the spill could continue through this century. With no fix in sight, the Taylor offshore spill is threatening to overtake BP’s Deepwater Horizon disaster as the largest ever.

As oil continues to spoil the Gulf, the Trump administration is proposing the largest expansion of leases for the oil and gas industry, with the potential to open nearly the entire outer continental shelf to offshore drilling. That includes the Atlantic coast, where drilling hasn’t happened in more than a century and where hurricanes hit with double the regularity of the Gulf.

Expansion plans come despite fears that the offshore oil industry is poorly regulated and that the planet needs to decrease fossil fuels to combat climate change, as well as the knowledge that 14 years after Ivan took down Taylor’s platform, the broken wells are releasing so much oil that researchers needed respirators to study the damage.

“I don’t think people know that we have this ocean in the United States that’s filled with industry,” said Scott Eustis, an ecologist for the Gulf Restoration Network, as his six-seat plane circled the spill site on a flyover last summer. On the horizon, a forest of oil platforms rose up from the Gulf’s waters, and all that is left of the doomed Taylor platform are rainbow-colored oil slicks that are often visible for miles. He cannot imagine similar development in the Atlantic, where the majority of coastal state governors, lawmakers, attorneys general and residents have aligned against the administration’s proposal.

The Taylor Energy spill is largely unknown outside Louisiana because of the company’s effort to keep it secret in the hopes of protecting its reputation and proprietary information about its operations, according to a lawsuit that eventually forced the company to reveal its cleanup plan. The spill was hidden for six years before environmental watchdog groups stumbled on oil slicks while monitoring the BP Deepwater Horizon disaster a few miles north of the Taylor site in 2010.

The Interior Department is fighting an effort by Taylor Energy to walk away from the disaster. The company sued Interior in federal court, seeking the return of about $450 million left in a trust it established with the government to fund its work to recover part of the wreckage and locate wells buried under 100 feet of muck.

Taylor Energy declined to comment. The company has argued that there’s no evidence to prove any of the wells are leaking. Last month, the Justice Department submitted an independent analysis showing that the spill was much larger than the one-to-55 barrels per day that the U.S. Coast Guard National Response Center (NRC) claimed, using data supplied by the oil company.

The author of the analysis, Oscar Garcia-Pineda, a geoscience consultant who specializes in remote sensing of oil spills, said there were several instances when the NRC reported low estimates on the same days he was finding heavy layers of oil in the field.

“There is abundant evidence that supports the fact that these reports from NRC are incorrect,” Garcia-Pineda wrote. Later he said: “My conclusion is that NRC reports are not reliable.”

In an era of climate change and warmer open waters, the storms are becoming more frequent and violent. Starting with Ivan in 2004, several hurricanes battered or destroyed more than 150 platforms in just four years.

On average, 330,000 gallons of crude are spilled each year in Louisiana from offshore platforms and onshore oil tanks, according to a state agency that monitors them.

The Gulf is one of the richest and most productive oil and gas regions in the world, expected to yield more than 600 million barrels this year alone, nearly 20 percent of the total U.S. oil production. Another 40 billion barrels rest underground, waiting to be recovered, government analysts say.

About 2,000 platforms stand in the waters off the Bayou State. Nearly 2,000 others are off the coasts of its neighbors, Texas and Mississippi. On top of that are nearly 50,000 miles of active and inactive pipelines carrying oil and minerals to the shore.

And the costs are high.

For every 1,000 wells in state and federal waters, there’s an average of 20 uncontrolled releases of oil – or blowouts – every year. A fire erupts offshore every three days, on average, and hundreds of workers are injured annually.

BP has paid or set aside $66 billion for fines, legal settlements and cleanup of the 168 million-gallon spill – a sum that the oil giant could, painfully, afford. But many companies with Gulf leases and drilling operations are small, financially at-risk and hard-pressed to pay for an accident approaching that scale.

One of them was Taylor Energy.

– – –

Taylor Energy was a giant in New Orleans.

Owned by Patrick Taylor, a magnate and philanthropist who launched an ambitious college scholarship program for low-income students, it was once the only individually owned company to explore for and produce oil in the Gulf of Mexico, according to his namesake foundation.

Taylor made what was arguably his most ambitious transaction in 1995, when he took over an oil-production platform once operated by BP. Standing in more than 450 feet of water, it was about 40 stories tall. Its legs were pile-driven into the muddy ocean floor and funnels were attached to 28 drilled oil wells.

At its peak, the oil company helped make Taylor and his wife, Phyllis, the richest couple in the Big Easy.

That investment was obliterated on Sept. 15, 2004, when Hurricane Ivan unleashed 145 mph winds and waves that topped 70 feet as it roared into the Gulf. Deep underwater, the Category 4 storm shook loose tons of mud and buckled the platform.

The avalanche sank the colossal structure and knocked it “170 meters down slope of its original location,” researcher Sarah Josephine Harrison wrote in a postmortem of the incident.

More than 620 barrels of crude oil stacked on its deck came tumbling down with it. The sleeves that conducted oil from its wells were mangled and ripped away. A mixture of steel and leaking oil was buried in 150 feet of mud.

Less than two months after the storm, Patrick F. Taylor died of a heart infection at 67, leaving a fortune for philanthropy and a massive cleanup bill.

Taylor Energy reported the spill to the Coast Guard, which monitored the site for more than half a decade without making the public fully aware of the mess it was seeing. Four years after the leak started, in July 2008, the Coast Guard informed the company that the spill had been deemed “a continuous, unsecured crude oil discharge” that posed “a significant threat to the environment,” according to a lawsuit between Taylor Energy and its insurer.

Taylor Energy made a deal with federal officials to establish a $666 million trust to stop the spill.

It would be a delicate, risky operation. Taylor and the contractors it hired were asked to somehow locate wells in a nearly impenetrable grave of mud and debris, then cap them. Failing that, it could create a device to contain the leak.

But they were forbidden from boring or drilling through the muck for fear that they would strike a pipe or well, risking the kind of catastrophe on the scale of the BP disaster a few miles south. That precaution slowed the pace of the salvage operation.

“We had no idea that any of that was going on,” said Marylee Orr, executive director of the Louisiana Environmental Action Network.

Taylor Energy spent a fortune to pluck the deck of the platform from the ocean and plug about a third of the wells. It built a kind of shield to keep the crude from rising.

But no matter what it did, the oil kept leaking.

– – –

In 2010, six years after the oil leak started, scientists studying the BP spill realized something was amiss with the oil slicks they were seeing.

“We were flying to monitor the BP disaster and we kept seeing these slicks, but they were nowhere near the BP spill,” said Cynthia Sarthou, executive director of the Gulf Restoration Network, which monitors the water from boats and planes.

Satellite images confirmed the oddity.

“It was there all the time, longer than the BP spill,” said John Amos, founder and president of Sky Truth, a nonprofit organization that tracks pollution.

Under the Oil Pollution Act, companies are obligated to report hazardous spills to the NRC, which maintains a database of chemical pollution.

No law compels the companies or the federal government to raise public awareness, but the Clean Water Act clearly calls for citizen involvement.

Environmentalists took Taylor Energy to court.

In their lawsuit, the conservationists called the agreement between Taylor Energy and the federal government a secret deal “that was inconsistent with national policy.”

That policy, they argued, was made clear in the Clean Water Act, which mandates “public participation in the . . . enforcement of any regulation.” Citizen participation, the act says, “shall be provided for, encouraged and assisted.”

Taylor Energy and the Coast Guard – which is part of a Unified Command of federal agencies that includes the Interior Department, National Oceanic and Atmospheric Administration and the Environmental Protection Agency – did not live up to the policy. In fact, the public wasn’t made aware of the spill even after a private firm tested fish in the area and submitted an assessment to Taylor Energy in 2009 that said “there is an acceptable risk to humans if fish from the . . . area are consumed.”

“Taylor has failed to provide the public with information regarding the pace and extent of the oil leaks and Taylor’s efforts to control the leaks,” the lawsuit said.

It would take another three years before the government revealed an even deeper truth. Taylor Energy had been playing down the severity of the spill. An Associated Press investigation in 2015 determined that it was about 20 times worse than the company had reported.

Taylor Energy had argued that the leak was two gallons per day; the Coast Guard finally said it was 84 gallons or more, and was almost certainly coming from any of 16 wells.

“There’s a fine for not reporting, but none for underreporting,” Amos said. “If it’s only three gallons a day, who cares, that’s a trivial problem.”

– – –

Nearly a decade after the oil platform went down, the government determined that the actual level of oil leaking into the Gulf was between one and 55 barrels per day. Now, the new estimate dwarfs that: up to 700 barrels per day. Each barrel contains 42 gallons.

Despite that finding, NOAA is still in the early stages of a resource assessment of marine life that could explain the impact of the Taylor Energy spill, and is more than three years behind a deadline to issue a biological determination of the BP spill’s impact on marine life.

In July, Earthjustice, a nonprofit legal organization that represents conservation groups, sued NOAA for failing to produce a timely study.

Like Eustis, Amos said Atlantic coast residents should be wary. But in that region, where beaches and tourism enrich nearly every state, distrust over offshore leasing and drilling is bipartisan.

Governors, state lawmakers and attorneys general lashed out at the administration’s proposal. New Jersey passed a law that forbids oil and infrastructure in state waters three miles from shore, crippling any effort to run pipelines from platforms to the shore. Other states passed similar laws.

In the Carolinas, where Hurricane Florence’s winds topped 150 mph and produced a monster 83-foot wave as it neared landfall, governors who represent both political parties implored Interior Secretary Ryan Zinke to rethink the plan.

Meanwhile, in the Gulf, Taylor Energy was down to a single employee – its president, William Pecue.

At a 2016 public forum in Baton Rouge, Pecue made the case for allowing the company to walk away from its obligation to clean up the mess. Taylor Energy had been sold to a joint venture of South Korean companies in 2008, the same year it started the $666 million trust. A third of the money had been spent on cleanup, and only a third of the leaking wells had been fixed. But Pecue wanted to recover $450 million, arguing the spill could not be contained.

“I can affirmatively say that we do believe this was an act of God under the legal definition,” Pecue said. In other words, Taylor Energy had no control over the hurricane.

But Ivan was no freak storm.

It was one of more than 600 that have been tracked in the Gulf since records were kept in the mid-1800s, according to NOAA.

Fourteen years after the Taylor spill, and 10 years after the Deepwater Horizon disaster, the federal government still doesn’t know the spills’ full impact on marine life. And there is no economic analysis showing the value of the oil flowing into the sea and potential royalties lost to taxpayers. Activists also want an analysis to determine if oil is ruining marshland and making its way to beaches.

“Even though oil did not reach a lot of these beaches [during the BP spill], the fact that the public heard about it, it killed the beach economy for quite some time,” Sarthou said. “You don’t want to go to a beach with tar balls or oil washing up.”

At the time, Sarthou was unaware that Garcia-Pineda was conducting a study in the Gulf that would show the spill was far worse than imagined – up to 10 times worse than what the federal government was reporting.

As the saga in the Gulf plays out, wary officials on the Atlantic coast are anxiously watching President Donald Trump’s proposal to offer federal offshore leases.

It would take at least a decade for Atlantic drilling to start. The industry would first want to conduct seismic testing to determine the amount of oil and gas in the ground. Depending on the results, companies would bid for the leases. Interior has yet to approve seismic testing, which some studies say harms marine life, including large mammals such as dolphins and whales.

Oil and gas representatives say energy development off that coast could provide South Carolina with $2.7 billion in annual economic growth, 35,000 jobs and potentially lower heating costs for residents struggling to pay their bills.

During a federal informational hearing in South Carolina to explain the Trump administration’s plan in February, Mark Harmon, the director of a state unit of the American Petroleum Institute, stressed that point. “Ultimately, it means the potential for jobs and reinvestment in the community,” he said.

Once the oil industry gains a foothold in a region, it’s game over, said Chris Eaton, an Earthjustice attorney.

“A major part of the economy starts to change” as jobs with pay approaching $100,000 transform a tourism market to oil. “If it gets going, that train isn’t going to stop,” he said. “Let’s talk about what’s happening in the Gulf before we move into the Atlantic.”

 

Tampa Bay Times / Darryl Fears / October 22

 

Mexican President-Elect Pledges to Save Country’s Oil Sector

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Sputnik News / October 15

 

MEXICO CITY (Sputnik) – Mexican President-elect Andres Manuel Lopez Obrador has pledged to save the country’s oil sector just like former Mexican President Lazaro Cardenas, who headed the country from 1934 to 1940, had done.

In March 1938, Cardenas announced the nationalization of the oil industry, and only in 2013, the Mexican Congress approved an energy reform opening the oil sector to private companies, including the foreign ones.

“We will produce oil because oil and gas production has been decreasing since the beginning of the energy reform. We will save the oil industry like Gen. Cardenas did in 1938,” Lopez Obrador posted on Twitter late on Sunday.

In September, Lopez Obrador, who won the election in July and will assume office on December 1, pledged that crude oil production would increase up to 2.6 million barrels per day from the current level of 1.8 million barrels per day by the end of his six-year-long administration.

In August, Pemex, Mexico’s major oil and gas company, produced oil at the average level of 1,816 million barrels per day, which is a 5.9 percent decrease year-on-year, and a 28 percent decrease compared with the notch registered in August 2013.

 

Sputnik News / October 15

 

Feature: Mexico’s oil industry cautiously optimistic of future energy policy

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S&P Global / Daniel Rodriguez / Edited by Pankti Mehta / October 1

 

Mexico City — Oil and gas executives attending last week’s Mexican Petroleum Congress (CMP) in Acapulco told S&P Global Platts that they were cautiously optimistic about the future of the country’s energy reform, pointing to higher oil prices and some clarification of President-elect Andres Manuel Lopez Obrador’s policies.

The conference took place as Lopez Obrador held a closed-door meeting with the country’s association of hydrocarbon producers, AMEXHI, on Thursday in Mexico City.

The incoming administration gave a firm message: Mexico will continue the energy reform and private upstream investment as long as they can deliver results by boosting output.

The meeting cleared some uncertainties that had built up since Lopez Obrador’s electoral victory in July. Obrador has been historically opposed to private investment in Mexico’s energy sector.

PRIVATE OPERATORS TO PRODUCE 280,000 B/D: LOPEZ OBRADOR

According to a video of the meeting obtained by Platts, Lopez Obrador told operators that the future of the reform rested on their shoulders.

“We want to give you the opportunity to invest and work on this reform,” Lopez Obrador said. However, companies must invest and boost output to prove the success of the country’s new energy model.

The president-elect said his goal is that private operators produce 280,000 b/d of crude oil and 305 MMcf/d of the natural gas by the end of his term in 2024. “That would be the ideal. We aren’t asking for more and we are happy with that level,” he said.

This is a very conservative projection compared to the 430,000 b/d estimate shared by outgoing Energy Secretary Pedro Joaquin Coldwell at the inauguration of CMP.

At a webcast press conference Thursday, Mexico’s future energy secretary Rocio Nahle said that auction rounds would be halted. She said the country first needs to evaluate the 110 contracts awarded to date because they have not helped boost domestic production.

“It would be irresponsible to continue auctioning areas without a previous production gain [from awarded areas],” Nahle said.

OPERATORS ARE CALM WITH INCOMING GOVERNMENT

AMEXHI members are allies of the state and can collaborate with Pemex to “continue strengthening Mexico’s energy security,” Alberto de la Fuente, AMEXHI’s president, said in a statement Thursday.

This message of partnership was also shared by senior executives from BHP Billiton, BP, Chevron, DEA Deutsche Erdoel, Equinor, and Shell at the CMP.

“We aren’t here to replace Pemex but to complement it and help to achieve the incoming administration’s goal of boosting oil output,” Steve Pastor, BHP Billiton’s president for petroleum operations, told Platts last week at the CMP.

De la Fuente denied that private operators were uncertain over the review of contracts awarded by the country’s National Hydrocarbon Commission (CNH).

In the statement, he said that AMEXHI members left the meeting with the incoming administration with the knowledge that Lopez Obrador will honor their contracts.

However, some industry members expressed their frustration to Platts at the conference about an apparent lack of understanding from the incoming administration on the long-term nature of the upstream industry.

INCOMING ADMINISTRATION WILL SEEK TO CUT RED TAPE

At the meeting with AMEXHI members, Lopez Obrador said his administration would work with regulators to cut the red tape and quicken the development of new projects.

“Some of you have told me permits take too long, and regulators delay your investment plans as well as Pemex’s activities,” Lopez Obrador said. “We are going to solve all bureaucratic roadblocks.”

Juan Carlos Zepeda, CNH’s president commissioner, told reporters Friday there was space to make the regulatory process leaner and more efficient while protecting the wellbeing of the country’s fields and hydrocarbon resources.

“We share views with President-elect Lopez Obrador and the industry … we are working toward that path without neglecting our responsibility of protecting Mexico’s reservoirs,” Zepeda said.

Right now, Mexico is more efficient than the US when it comes to the development of wells as CNH only requires notice from the operators instead of regulatory approvals, Zepeda said.

Also, CNH is working on a new process to expedite the approval of exploratory and development programs, which is currently under public consultation, he added.

A major regulatory roadblock for Mexico’s upstream sector has been Pemex’s framework to farmout projects via CNH auctions, Pemex senior officials said at CMP.

Zepeda said he supports the idea of Pemex being able to choose its own farm out partners. However, the company should maintain transparency levels upheld by CNH.

 

S&P Global / Daniel Rodriguez / Edited by Pankti Mehta / October 1

 

LOS BENEFICIOS DE LOS SEGUROS EN EL SECTOR HIDROCARBUROS

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Las garantías financieras son instrumentos a través de los cuales los titulares de los contratos firmados con la Comisión Nacional de Hidrocarburos (CNH), garantizan el cumplimiento de las obligaciones asumidas. Entre éstas se encuentran los seguros.

Su principal característica es la de fungir como un respaldo económico ante diversas contingencias, ya sea que recaigan en el mismo asegurado o un tercero afectado, como consecuencia de una acción u omisión del asegurado

Existen ciertas actividades en las que existe una mayor exposición al riesgo y con ello una mayor probabilidad de causar daños a terceros y en estos casos, las autoridades en aras de promover el bienestar general, incluyeron en las regulaciones los  seguros para que los responsables cuenten con los recursos necesarios para reparar los daños o perjuicios ocasionados.

Es el caso de los seguros para el sector hidrocarburos que fueron regulados por la Agencia de Seguridad, Energía y Ambiente (ASEA) a partir de la Reforma Energética.

El artículo 6, fracción I, inciso c, de la Ley de la ASEA, establece la facultad de dicha Agencia, para: “Regular el requerimiento de garantías o cualquier otro instrumento financiero necesario para que los Regulados cuenten con coberturas financieras contingentes frente a daños o perjuicios que se pudieran generar…”

Los seguros que se requieren en el sector energético son complejos, pues generalmente a través de ellos, se amparan los riesgos de las  operaciones de exploración y extracción de hidrocarburos en aguas profundas; transporte de petróleo por barco; tendido de ductos; construcción y operación de terminales de almacenamiento, etc.

Para asegurar adecuadamente a una empresa es necesario conocer su experiencia, sus características,  sus medidas de seguridad operativa e industrial, sus obligaciones contractuales y lo más importante,  el tipo de riesgos a los que está  expuesta, considerando que:

  • Los hidrocarburos y petrolíferos son actividades peligrosas por sus características de inflamabilidad y explosividad;
  • Se les considera actividades altamente riesgosas;
  • Conllevaninfraestructura de grandes dimensiones y con altos grados de inversión económica;
  • Se pueden encontrar en zonas social y ambientalmente vulnerables y
  • Están expuestas a las acciones u omisiones de contratistas, sub-contratistas y proveedores de servicio.​

NRGI Broker ofrece asesoramiento profesional para la contratación de los programas integrales de seguros, con las coberturas que pueden contratarse en México, pero también cuenta con la capacidad para colocar coberturas en el mercado internacional de reaseguro, cuando se trata de “grandes riesgos”.

En México experimentamos la reconfiguración del sector energético, que dio lugar a una mayor  participación de empresas del sector privado, nacional e internacional, así como  nuevas obligaciones  por lo que las empresas  requieren que sus inversiones estén correctamente respaldadas  y trabajar con proveedores ágiles, con costos y tiempos de respuesta eficientes y para la consecución de ese objetivo, por ello es fundamental la contratación de un corredor de seguros experimentado, especializado y confiable.

En NRGI Broker, contamos con la experiencia y la especialización en seguros para todas las actividades el sector energético que necesitas. Acércate a nosotros, con gusto te atenderemos.

 

Chevron signs contract for refined fuels terminal in Mexico

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Hydrocarbons Technology / September 17

 

Chevron Combustibles de México has signed a long-term contract with Sempra Energy’s Mexican subsidiary, Infraestructura Energética Nova (IEnova), to use 50% of the initial capacity of the proposed Topolobampo refined fuels marine terminal.

IEnova is developing the refined fuels terminal in Sinaloa, Mexico, with an initial capacity of one million barrels.

Pursuant the contract, subsidiaries of Chevron will have storage capacity of 500,000 barrels of refined fuels.

In addition, Chevron will have an option to purchase up to 25% of the equity in the terminal following the commencement of commercial operations.

IEnova also signed a contract with an undisclosed US refiner for the remaining 50% of the facility’s initial storage capacity.

“The Topolobampo project provides an important supply source of refined fuels for Mexico.”

IEnova executive chairman Carlos Ruiz Sacristán said: “The Topolobampo project provides an important supply source of refined fuels for Mexico. Together, working with our customers, this terminal will increase reliability of supply, create jobs and provide benefits to millions of Mexican consumers.”

IEnova received a 20-year contract in July this year from the Topolobampo Port Administration Terminal to develop, construct and operate the marine terminal in Sinaloa.

The terminal involves an estimated investment of $150m and is expected to become operational in the fourth quarter of 2020.

Last week, IEnova reached a deal to allow British Petroleum to use 50% of the one-million-barrel initial capacity of the refined fuels Baja Refinados terminal, which is to be constructed in Baja California.

Earlier this year, Chevron booked the other 50% initial capacity of the Baja Refinados facility.

 

Hydrocarbons Technology / September 17

 

The regime of strict liability in the activities of Exploration and Extraction of hydrocarbons

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The General Administrative Provisions that establish the Guidelines on Industrial and Operational Safety and Environmental Protection to carry out the activities of Surface Recognition and Exploration, Exploration and Extraction of Hydrocarbons (DACG/E&E), were published in the Official Gazette of the Federation, issued by the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector (ASEA), established  that those who carry out works or activities for the exploration and extraction of hydrocarbons are subject to a regime of strict liability, that is, they operate under the assumption that they are creating a risk to people and the environment and, therefore, in case of causing damage they must carry out its repair, without this being conditioned to prove their fault.

 

Derived from the above, ASEA imposes on operators the obligation to perform all actions necessary to prevent environmental damage arising from the risks created, for which they must contain, characterize and remedy them with opportunity under their own processes and according to the applicable legislation and regulations.

 

In this sense, the “DACG/E&E” establish that Exploration and Extraction activities must be carried out under certain principles, such as:

 

  1. Minimize the risks at a level that is as low as reasonably possible, that is, up to a level where it is demonstrated that the cost of continuing to reduce that risk is greater compared to the economic benefit that would be obtained. This allows a reasonable balance between economic activity and the protection of third parties and the environment.
  2. Regularly review the risk reduction measures in order to update them based on the technological development and specialized knowledge.

 

  1. Implement emergency measures and foster a culture of the protection of people, the environment and facilities.

 

The aforementioned principles are aimed at preventing the accidents from happening, so they must be complemented with measures that have as their object the repair and / or compensation of the damages caused by the an accident.

 

One of the most effective measures to achieve this is to have financial instruments that allow for the consequences of the materialization of risks, such as an insurance.

At NRGI Broker we are experts in insurance for the Exploration and Extraction of Hydrocarbons. Come to us.

 

The strategic value of the pipelines

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The Five-Year Expansion Plan of the National Integrated Natural Gas Transportation and Storage System 2015-2019 contemplates the construction of more than 5,000 km of natural gas pipelines, with an estimated investment of close to 10,000 million dollars. For its elaboration, the National Infrastructure Program 2014-2018 was taken as a basis, in which the gas pipeline construction projects are planned, with an approach that seeks to guide the integral functionality of the new infrastructure of the country.

On the other hand, the main objective of the Quinquennial Plan is to bring natural gas, considered the most efficient fuel and of intensive use, to different areas of the country, among which are Hidalgo, Puebla, Veracruz, Aguascalientes, Durango, Michoacán, Guerrero, San Luis Potosi, Chihuahua, Sonora, Oaxaca, Tamaulipas and Nuevo Leon, especially in industrial areas and those where up to now this hydrocarbon has not been accessed.

The foregoing is in line with one of the objectives of the Energy Reform, consisting of the safe, reliable and competitive supply of natural gas.

These new gas pipelines will be added to the more than 10,000 km already existing, and will increase the capacity of transportation of natural gas by 50%.

It is worth mentioning that the expansion of the gas pipeline network can bring with it a greater possibility of accidents, considering that the pipelines are one of the means of transport that present a greater frequency and severity of accidents, due to the fact that they are exposed to various hazards as: explosion, fire, natural phenomena and ill-intentioned acts.

Therefore, it is very important that during the construction and operation of the pipelines, the insurance coverage is adequate for the complexity of this means of transport, for which it must be taken into account that the damages may affect the infrastructure, people, their assets and the environment.

In NRGI Broker we are experts in designing comprehensive insurance schemes for the Hydrocarbons Sector, come to us.

 

Oil industry encouraged by Trump’s trade deal with Mexico

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Washington Examiner/ John Siciliano / August 27

 

President Trump’s announcement with Mexico on Monday is being taken as an encouraging sign by the U.S. oil and natural gas industry.

“We are encouraged that negotiators have reached a preliminary agreement to modernize our trade relationships,” said Mike Sommers, the new president and CEO of the American Petroleum Institute, the oil industry’s top lobbyist in Washington.

“America’s natural gas and oil industry depends on trade to continue to grow U.S. jobs and our economy, and deliver for consumers,” he added.

Trump announced Monday morning that progress had been made toward a deal with Mexico on renegotiating the North American Free Trade Agreement. Negotiations with Canada, the final piece in the agreement, are still ongoing.

Trump called it a “big day for trade” and the nation in an Oval Office announcement in which he teleconferenced with outgoing Mexican President Enrique Pena Nieto.

Energy has been a key aspect of the negotiations on a revamped version of NAFTA. However, no announcement on energy trade was made on Monday. The agreement with Mexico centered on ensuring that a higher percentage of automobiles sold in North America are made with parts produced on the continent.

Negotiations on an update to the free trade agreement had stalled in recent months amid disagreements over, among other things, provisions related to the automotive and energy industries. U.S. and Mexican negotiators, however, had made breakthroughs on those issues ahead of Monday’s announcement.

Jesus Seade, the incoming Mexican government’s chief NAFTA negotiator, said Sunday the energy issues have been “ironed out,” without going into detail, Reuters reported.

Mexico has become a large importer of U.S. natural gas and oil in recent years. Energy Secretary Rick Perry had visited Mexico ahead of Monday’s announcement. He was there to discuss “how the U.S. and Mexico can continue to work together to make North America a world-wide leader in energy production and exports,” Perry said last week in a tweet.

 

Washington Examiner/ John Siciliano / August 27