Transcript Diapositive 1 - Canadian Manufacturers & Exporters

Mexico’s Changing Energy
Presentation name
Landscape and Opportunities
(Name of presenter)
for Canadian Suppliers
(Position)
(Division/Post name,
Presentation by François Rivest
City)
Senior Trade Commissioner
Embassy of Canada to Mexico
Mexico: 5th most important destination for
Canadian exports*
Canadian Exports to Mexico in 2013:
 9.847 billion USD
 Main Canadian products exported to Mexico:
Manufactured goods (over 50%), vehicles and auto parts,
iron and steel products, cereals, and meat.
*Using respective import statistics for consistency.
Mexico is …
In Latin America:
The most important
trading partner for
Canada
Globally:
3rd most important
trading partner in
terms of bilateral trade*
Canada-Mexico Bilateral
Relationship 2013
Highest level in history
$35.7 billion USD
NAFTA= 750%
more bilateral trade between Canada and
State of the Energy Sector
in Mexico
• Mexico’s crude oil production declined from 3.4
mbd (2004) to 2.5 mbd (2013).
• Over last decade, gas consumption increased
70%, but production only 46%.
• Without reform, the country could become a net
importer of energy by 2020.
Mexico’s Energy Reform
Oil and Gas
• State will enter into a wider spectrum of contracts
with the private sector.
• Upstream oil & gas sector: State will be able to
enter into service; profit sharing; production
sharing; and/or licensing contracts with the private
sector.
• Midstream and downstream oil & gas sectors:
State to enter into licensing contracts with the
private sector.
• Sovereign wealth fund to manage oil revenues.
Mexico’s Energy Reform
Electricity
• Private sector will participate in electrical power
generation (construction, maintenance and
operation of electrical grids), transmission, and
distribution.
• Inclusion and encouragement of renewable and
clean energy in Mexico’s energy matrix.
• Additional organizational and operational autonomy
and flexibility granted to CFE.
New Institutions and Roles
• The National Hydrocarbons Commission and
Energy Regulatory Commission will be
independent regulatory agencies.
• The Ministry of Energy will be responsible for the
selection of which reservoirs and blocks to contract
and contract specifications.
• The CNH remains in charge of E&P regulation, and
will take over from Pemex as the institution carrying
out tendering and supervising development plans.
Pemex Round Zero
• Pemex requested to ‘keep’ 83% of 2P reserves.
• Sener has until September to define the areas that
Pemex will be entitled to keep.
• The target for Round 1 bids for contracts and
licenses is June 2015.
Secondary Legislation
• Clearer definition of licensing contracts.
• Will set out the procedures for establishing
recuperation costs, and the percentages due to
Pemex and to the Mexican state.
• Governance: Pemex, Sener, CNH, CRE.
• Impact on FDI and value chain.
Rule of Law and Political
Risks
• Challenges to licensing regime.
• Referendum law and PRD opposition.
• Institutional capacity.
Pemex procurement from
Canada
Entry Channels
• Key contractors & integrated service companies
– International
– Mexican
• Representatives, agents, and partners
Opportunities in E&P
• Geology: world’s 6th largest shale gas recoverable
reserves and 8th largest for shale oil.
• Reform:
– Private investment in deepwater drilling, shale
oil & gas and mature fields.
– 500,000 bpd produced by private sector within 4
years.
Opportunities in Transport
• Encouraging opportunities for pipelines.
• Upcoming Pemex and CFE bids.
• Uncertainty on whether some facilities will revert to
Pemex Gas.
Opportunities in
Electricity
Main areas of opportunity:
(1) power generation
(2) electricity grid.
Energy Reform Milestones
•
•
•
•
•
•
•
•
August 12, 2013: Reform presented to Congress by President.
December 13, 2013: Mexican Congress passes energy reform.
December 20, 2013: Reform signed into law by President Peña
Nieto.
March 2014: Beginning of congressional discussions on secondary
laws.
March 21, 2014: Round 0: Pemex applies for blocks it wishes to
continue operating.
June 2014: Issuance of secondary laws (now expected in 2nd
extraordinary Congress session).
September 21, 2014: Deadline for Sener to confirm areas
allocated to Pemex and to decide on which fields to open up for
private investment.
June 2015: Target for first bids for contracts and licenses.
Key Considerations
• Economics of future contracting models?
• Level of ambition in blocks to be tendered to
private sector.
• Transparency in the bidding and contracting
processes.
Our network in Mexico
Canadian Embassy
Mexico City
[email protected]
Consulate General
Monterrey
[email protected]
Consulate
Guadalajara
[email protected]
Connect with the TCS
tradecommissioner.gc.ca