Pemex is going to have to do some work to convince Investor Owned Oil Companies that they are willing to move past their Nationalistic Oil Company attitudes.
Posted on 10/20/2008 8:23:31 AM PDT by thackney
Mexico's energy reform just got a shot in the arm. The financial crisis and tanking oil prices puts a premium on private capital to help shore up the struggling industry, dampening a nationalist backlash.
But oil firms are unsure if the reform, which was watered down earlier this year following heavy attacks from left-wing politicians, will offer enough to deploy capital south of the U.S. border.
The risks are high for both Mexico and the U.S.
Mexico will be importing crude within seven years unless it finds and develops new pools of oil fast. This would undermine state revenue and erase a main source of U.S. crude imports.
With oil prices down by nearly half since July and credit markets in retreat, Pemex needs help.
"The credit crunch has certainly put pressure on Pemex to utilize all its resources and design the most enticing incentive-based contracts that it can conjure up," said Gianna Bern, the president of Brookshire Advisory and Research, Inc., an energy and capital markets consultancy.
Pemex normally borrows around $5 billion a year to finance operations and smooth out its debt payment schedule.
"Financing costs have gone up markedly and credit is scarce," said Bern.
If passed, the reform will introduce fee-based exploration and production contracts. It will also streamline bureaucracy at state-run Petroleos Mexicanos, making it easier to outsource projects to traditional oil service providers.
"The entire world is going through a difficult time, and we have to find solutions," said Francisco Labastida, the head of the Senate energy committee from the centrist Institutional Revolutionary Party, or PRI.
He said the Senate vote could come as early as next week. Any changes also have to be passed by the lower house of Congress.
Oil Firms Not Convinced
(Excerpt) Read more at rigzone.com ...
Pemex is going to have to do some work to convince Investor Owned Oil Companies that they are willing to move past their Nationalistic Oil Company attitudes.
Atlas shrugged.
Yep. First things that came to mind upon reading this article: D’Anconia’s copper mine and the Rio Norte Line.
Pemex ping!
If you want on, or off this S. Texas/Mexico ping list, please FReepMail me.
You’re saying, “With Mexico’s history, I don’t think I would put any of MY money into the Mexican oil business.” If you were the CEO of a corporation, well that’s a different story isn’t it?
There’s a big difference between MY money and the stockholders money. That’s why politicians have no r3egrets when taxpayers get screwed. They can slough it off with saying, “I did what appeared to be the best solution at the time.”
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