THE OIL & GAS YEAR MEXICO 2015 OIL & GAS YEAR The Who’s Who of the Global Energy Industry MEXICO THE OIL & GAS YEAR ISBN 978-1-78302-100-0 9781783021000 Mexico’s energy policy

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Mexico’s energy policy reformationEnrique PEÑA NIETOPresident of Mexico

Instruments of changePedro JOAQUÍN COLDWELLSecretary of Energy

Trial by fireEmilio LOZOYA AUSTINCEOPEMEX

ARTICLES | INTERVIEWS | VIEWPOINTS | MARKET ANALYSIS | RESOURCES | PROJECTS | MAPS | INVESTOR SPOTLIGHTS

MEXICO 2015

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Following the passing of secondary legislation for Mexico’s energy reform in

August 2014, calls to bid for the first two shallow-water rounds kick-started

the Round One tender in December 2014 and February 2015.

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8 THE YEAR IN REVIEW

9 INTERVIEW: Enrique Peña Nieto, President of Mexico10 INTERVIEW: Pedro Joaquín Coldwell, Secretary of Energy12 THE YEAR’S AWARDS14 MEXICO AT A GLANCE16 INVESTORS INDEX17 RESOURCE: Pemex Exploración y Producción’s budgeted

exploration investments, 201518 THE YEAR IN ENERGY

20 POLITICS & REGULATION

21 ARTICLE: The Mexican energy market reborn. New legislation has reformed the Mexican hydrocarbons industry

22 INTERVIEW: Enrique Ochoa Reza, Federal Electricity Commission23 VIEWPOINT: Industry inspiration. Lourdes Melgar, Undersecretary

of Hydrocarbons24 VIEWPOINT: Novel regulation. Guillermo Zúñiga Martínez, Energy

Regulatory Commission26 MARKET ANALYSIS: Savings plan. Julio Alfonso Santaella Castell,

The Mexican Petroleum Fund for Stabilisation and Development27 INTERVIEW: Erik Legorreta, AMIPE28 MARKET ANALYSIS: Safety in the balance. José Luis Calderón

González, Eximco Protección Perimetral30 ARTICLE: The standard bearer. ASEA ensures the safe development

of the Mexican oil and gas industry. Carlos De Regules, National Agency for Safety

31 VIEWPOINT: The right impression. Ruben Camarillo Ortega, National Action Party

31 FORUM: Border crossing. Trade relations between Mexico and the US play a vital role in the Mexican energy reform

34 EXPLORATION & PRODUCTION

35 ARTICLE: International interest, national intention. Mexico’s initial offshore oil blocks auction has attracted the interest of exploration andproduction companies from around the world

35 IN PRODUCTION: Pemex crude oil production and investments37 INTERVIEW: Gustavo Hernández Garcia, Pemex Exploración y

Producción38 VIEWPOINT: Round up. David McDonald, Noble Energy40 INTERVIEW: Adrian Rodriguez-Montfort, BG Group42 INTERVIEW: Alberto de la Fuente, Shell Mexico43 PULLOUT MAP: Infrastructure, fields and basins, 201544 INTERVIEW: Fabio Ortega, Ecopetrol45 COMPANY PROFILE: Sierra Oil And Gas 45 IN SUBSTANCE: Mexico’s crude production by type46 PROJECT HIGHLIGHT: Ayatsil-Tekel-Utsil field development48 INVESTOR SPOTLIGHTS: BHP Billiton Petroleum Mexico,

Monument Oil & Gas, Omega Energy, Trayectoria Oil & GasFOLDOUT MAP: The Round One tender

49 GEOLOGY REPORT: The geologic and tectonic formation of Mexico’s southeastern basins. Mexico’s most productive deposits

50 COMMENT: Mexico’s struggle against pipeline theft. The state is looking for ways to address increasing losses due to theft

50 RESOURCE: Illegal hot taps in Mexico51 ARTICLE: Round One. Mexico’s Round One tender opens up new

blocks for bids from the private sector52 VIEWPOINT: The new rules of the game. Eduardo Camero Godínez,

Secretariat of Finance and Public Credit53 INVESTOR SPOTLIGHTS: Cobalt International Energy, ExxonMobil

México, ONGC Videsh54 VIEWPOINT: Hydrocarbons renaissance. Luis Vielma Lobo,

CBM Ingeniería Exploración y Producción56 ARTICLE: Data is king. The National Hydrocarbons Commission and

Mexico’s Round One data room. Sergio Pimentel Vargas, National Hydrocarbons Commission

57 COMMENT: Challenges and opportunities for the geoscience community. Mexico must promote technical education. Ulises Hernández Romano, Mexican Association Of Petroleum Geologists

58 STRATEGIC ROUNDTABLE

59 STRATEGIC ROUNDTABLE PARTICIPANTS60 SECTOR FOCUS DEBATE

FOLDOUT RESOURCE: Pemex timeline

66 THE YEAR’S FOCUS: THE EVOLUTION OF PEMEX

67 ARTICLE: The end of an era. Pemex’s monopoly has ended, opening Mexico’s oil and gasfields up to foreign players

67 IN DEVELOPMENT: Development wells completed in Mexico68 INTERVIEW: Emilio Lozoya Austin, Pemex70 INTERVIEW: Arturo Henríquez Autrey, Pemex Office of Corporate

Procurement71 COMPANY PROFILE: PMI Comercio Internacional72 INTERVIEW: Mario Beauregard Álvarez, Pemex73 IN DISCUSSION: Froylán Gracia Galicia, Pemex, Alejandro Martínez

Sibaja, Pemex Gas y Petroquímica Básica74 ILLUSTRATION: Bay of Campeche developments

76 GAS & PIPELINES

77 ARTICLE: Shale time. Mexico is seeing a new era of foreign investment and infrastructure development

77 IN COMPARISON: Mexico’s gas production and consumption79 MARKET ANALYSIS: A gas structure for growth. David Madero

Suárez, National Centre for Natural Gas Control80 INTERVIEW: Agustín Humann Adame, Mexican Natural Gas

Association81 PROJECT HIGHLIGHT: Los Ramones pipeline project82 MAP: Natural gas pipelines, existing and planned

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20Politics & Regulation

Mexico is in the midst of implementing its En-ergy Reform Act, which opened up the coun-try’s oil and gas market to international oper-ators. Regulatory institutions restructured bythe legislation are now concentrating onbringing in foreign investment. As part ofthese efforts, the Round One tender for oiland gas blocks is underway, with the first re-sults to be announced in September 2015.

34Exploration & Production

While the Mexican oil and gas industry is en-thusiastic about the energy reform, it is alsocoping with the effects of the global oil priceslump, as Pemex announced a $4-billion budgetcut in February 2015. But the steep ongoingdecline in Mexico’s national hydrocarbons out-put means the country has no choice but topush forward to find companies that will helpit take advantage of potentially major untappedreserves, particularly in the Gulf of Mexico.

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66The Year’s Focus: The Evolution of Pemex

National oil company Pemex has given upits monopoly on the Mexican energy industryand revamped its corporate structure to fa-cilitate the reform of the country’s oil andgas market. The move will place Mexico in abetter position to capitalise on the techno-logical expertise of international companiesand encourage further exploration activity.

88Oilfield Services: Domestic

Domestic oilfield services companies aregearing up for a period of rapid expansionas a result of the opening of Mexico’s oil andgas market. From enhanced oil recovery torig provision, services providers will be inhigh demand. The Mexican government hastried to ensure that local businesses will ben-efit from increased exploration and produc-tion through local content requirements.

76Gas & Pipelines

Latin America’s largest natural gas consumer,Mexico, is expanding its midstream infra-structure to meet rising demand. The open-ing of the energy industry is expected to en-able the exploitation of the country’s shalereserves, but in the meantime US gas willhelp meet domestic needs. The Los Ramonespipeline, which saw its first phase completedin December 2014, will bring gas to the Mex-ican market from its northern neighbour.

83 MARKET ANALYSIS: Barge into the midstream. Fernando Calvillo Alvarez, Fermaca

84 INTERVIEW: Carlos Ruiz, Grupo Tomza85 VIEWPOINT: Natural consideration. Alvaro Rios Roca, Gas Energy

Latin America86 MAP: Mexico’s prospective shale gas reserves86 INVESTOR SPOTLIGHTS: Tuberia Laguna, Enagás

88 OILFIELD SERVICES: DOMESTIC

89 ARTICLE: Time to change the game. With the new energy reform, oilfield services firms are gearing up for a period of rapid expansion

89 IN PRODUCTION: Mexico’s crude production, 2014 90 INTERVIEW: Ricardo Arce, Perforadora México91 MARKET ANALYSIS: Operational shift. Alfredo Bejos Checa, Luis

Zagaglia Allende, Diavaz DEP92 INTERVIEW: Ricardo Orrantia, Grupo Altavista94 INTERVIEW: Patricio Alvarez Morphy Camou, Perforadora Central95 VIEWPOINT: The right tools for the job. Gonzalo Gil White,

Oro Negro

96 OILFIELD SERVICES: INTERNATIONAL

97 ARTICLE: Unconventional wisdom. The end of Pemex’s monopoly brings opportunities for foreign oilfield services providers

97 IN OFFSHORE: Pemex’s deepwater drilling results, 2013 98 INTERVIEW: John D. Lawrence, DTK Group99 INTERVIEW: Hugo Espinosa Quiroga, Baker Hughes

100 COMPANY PROFILE: Schlumberger100 IN DRILLING: Number of wells drilled in Mexico, 2004-2013101 COMMENT: Mature giant. Heavy investment is required to keep

Mexico’s mature fields producing at targeted rates102 COMPANY PROFILE: Cameron International103 INVESTOR SPOTLIGHTS: GE Oil & Gas, Petrofac Mexico104 INTERVIEW: Kurt Alexander Machnizh, Paradigm106 COMPANY PROFILE: Petroleum Geo-Services106 IN FLUX: Mexico’s proven reserves replacement rate, 2009-2013107 VIEWPOINT: Shale and water. Pablo Pérez, Joint Venture Solutions108 INVESTOR SPOTLIGHTS: Welltec Oilfield Services México,

Odebrecht Oil & Gas Mexico, Command Energy Services, Tesco Corporation

109 COMMENT: Frack potential. Mexico’s large shale deposits

110 CONSULTING & FINANCE

111 ARTICLE: Guidance in a new era. Consultancies and local partnerships will be valuable as the Mexican market opens up

111 IN EXCHANGE: Value of US dollar against Mexican peso113 INTERVIEW: Rafael Parrilha, Bureau Veritas114 INTERVIEW: Juan Trebino, PwC Strategy&, Guillermo Pineda, PwC115 MARKET ANALYSIS: A guiding hand. José Pablo Rinkenbach,

Ainda Consultores

116 INTERVIEW: Eckhard Hinrichsen, DNV GL117 INTERVIEW: Manuel Ortiz Monasterio, Alberto Sambartolomé,

Environmental Resources Management México118 INFOGRAPHIC: Employment in oil and gas in Mexico120 INTERVIEW: Hernando Gómez de la Vega, Fanny Guedez Sayago,

Reliability & Risk Management 121 COMMENT: Environmental concerns. The Mexican public remains

sensitive about the environment, despite new protection measures122 FORUM: Transition to a new market. New industry rules could be

challenging for some companies, but beneficial for others123 ARTICLE: Preparation for an energy revolution. President Peña

Nieto’s radical efforts have piqued the interest of foreign investors124 INTERVIEW: Mark Ammerman, Scotiabank125 MARKET ANALYSIS: The Mexican exchange. Pedro Zorrilla

Velasco, Mexican Stock Exchange126 INTERVIEW: Carlos E. Williamson, Navix

128 DOWNSTREAM & MARKETING

129 ARTICLE: Open for business. About $50 billion worth of investments are expected to be pumped into the domestic downstream sector

130 INTERVIEW: Raúl Baz y Harvill, Raúl Márquez Cumming, GP Beta131 MAP: Refineries in Mexico132 INTERVIEW: Roberto Bischoff, Braskem Idesa133 PROJECT HIGHLIGHT: Ethylene XXI134 INTERVIEW: Constantine Galanis, Química Apollo135 COMMENT: Refined vision. Mexico’s refineries need upgrades135 MARKET ANALYSIS: Free market fuel. William Karam, Grupo

Hidrosina136 IN STATIONS: Petrol prices across the Americas, June 2015138 VIEWPOINT: The full potential. Miguel Benedetto, ANIQ139 INTERVIEW: Antonio Carrillo Rule, Mexichem140 ARTICLE: Terminal overhaul. Pemex’s terminals will undergo major

systems upgrades140 IN VOLUME: Mexico’s refined products production, 2010-2015 142 INTERVIEW: Santiago Zubiria, Schneider Electric 144 COMPANY PROFILE: Rotork145 COMMENT: Infrastructure push. The National Infrastructure

Programme will attract major investments146 INTERVIEW: Jaime Lezama, Endress+Hauser México146 IN SALES: Pemex’s domestic sales of refined products148 COMPANY PROFILE: Rockwell Automation de Mexico149 INVESTOR SPOTLIGHTS: Grupo Altavista, FMC Technologies,

Yokogawa

150 ENGINEERING & CONSTRUCTION

151 ARTICLE: The roads ahead. Billions of dollars earmarked for infrastructure upgrades will bring opportunities

152 COMPANY PROFILE: Empresas ICA154 INTERVIEW: Fernando Zedillo, Consorcio Constructor e

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155 ILLUSTRATION: Perforadora Central jack-up rig156 INVESTOR SPOTLIGHTS: Construcciones Industriales Tapia,

Mexicana de Recipientes a Presión, Swiber Offshore Mexico,TransCanada International

158 INTERVIEW: Eduardo Arratia Vingardi, Scap159 COMPANY PROFILE: Sicim159 RESOURCE: El Encino-La Laguna pipeline route160 COMPANY PROFILE: Nuvoil161 COMMENT: Mexico in oil recovery. The Energy Reform Act will offer

benefits for engineering, procurement and construction companies162 INTERVIEW: Abraham Baruch Zepeda Reyna, Grupo Hosto163 IN DISCUSSION: Juan Manuel Pineda Alvarez, McDermott

International, Sergio Saldivar, Amec Foster Wheeler

164 MARINE & LOGISTICS

165 ARTICLE: A sector on the move. Mexico faces logistical challenges165 IN THE WATER: Deadweight tonnage range of vessel classes166 VIEWPOINT: Port system overhaul. Fernando Gamboa,

Secretariat of Communications and Transportation166 IN DEVELOPMENT: Infrastructure investment programme167 MAP: Mexico’s major ports168 COMPANY PROFILE: C&C Technologies Geomar de Mexico169 INTERVIEW: Alaster Love, Transplace170 INTERVIEW: Enrique Zepeda Navarro, Transportes Aereos Pegaso171 COMMENT: Challenges in the deep. Foreign firms in deepwater172 INTERVIEW: Francisco Sierra Luna, Duncan y Cossio172 IN RESERVES: 1P, 2P and 3P offshore oil and gas reserves173 COMMENT: Under the deep sea. The Perdido Fold Belt holds

promise for foreign entities looking to enter Mexico174 MARKET ANALYSIS: Helicopters rise above slump. Humberto

Lobo de la Garza, Aeroservicios Especializados 175 IN THE REGION: Regional rig use and trade movements

176 MARKET ANALYSIS: A shipping surge. Diego Aguilar, McQuilling de Mexico

177 INVESTOR SPOTLIGHTS: Veracruz Port Authority, Secretariat of Communications and Transport, Tuxpan Port Authority,Saam Remolcadores

178 ASSOCIATED SERVICES & SUPPLIES

179 ARTICLE: Services for a changing industry. The energy reform will create opportunities for domestic private services companies

179 IN VALUE: Major energy projects, 2014-2018180 INTERVIEW: Juan Carlos Luna Cervantes, SICA Medición182 VIEWPOINT: What next? Maria Griselda Hernandez, Kelly Services 183 ARTICLE: Mexico’s other reform. As international investors arrive

in Mexico’s restructured hydrocarbons industry, the Mexican labourmarket will need skilled workers

184 MARKET ANALYSIS: Automation nation. Octavio Rodríguez,Grupo Ami

185 COMPANY PROFILE: Siemens186 MARKET ANALYSIS: Human Capital. Fausto Muñiz, Grupo

Empresarial PAE187 IN DISCUSSION: Carlos Salman Gonzalez, Sigsa, Carlos Palavicini,

Petrolink188 INTERVIEW: Alfonso Felix Guzmán, Grupo Comex188 IN FUNDING: Expected ratio of public-private investment for

National Infrastructure Programme

190 EXECUTIVE GUIDE

191 ACCOMMODATION194 EVENTS195 ACKNOWLEDGMENTS | ADVERTISERS INDEX196 IN BRIEF

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164Marine & Logistics

Mexico’s deepwater and ultra-deepwater playshold much promise for oil and gas companieslooking to enter the newly liberalised market.However, a bid round for unconventional re-sources has been suspended until oil pricesrecover. In Mexico’s logistics sector, severalport expansions are planned to upgrade ter-minal processing capacity to make the exportand import of hydrocarbons more efficient.

178Associated Services & Supplies

Recently opened for the first time in 76 years,Mexico’s oil and gas market holds opportunitiesfor both domestic and international players.Local services providers and suppliers will sig-nificantly benefit from partnerships with for-eign operators looking to enter the Mexicanmarket. The country’s technical education pro-grammes are undergoing reform in order tofacilitate the training of the 500,000 new skilledworkers that the market will require by 2018.

150Engineering & Construction

Infrastructure throughout the Mexican hydro-carbons value chain is in need of upgrades.With overused pipelines and only six refiner-ies – all of which are outdated – engineering,construction and procurement companies inthe country are poised to take advantage ofupcoming opportunities. While Pemex’s budgetcuts are likely to have a negative impact on thesector, several projects are expected to moveforward in the near future, providing relief.

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Exploring knowledgeExtracting intelligenceRefining communicationINTERNATIONAL



9 Mexico’s energy policy reformationEnrique PEÑA NIETO

President of Mexico

10 Instruments of changePedro JOAQUÍN COLDWELL

Secretary of Energy

12 The Year’s Awards

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What are the obstacles associated with im-plementing the 2014 reforms and how is thegovernment addressing these obstacles? Implementation represents a major challengein moving forward with the 2014 reforms. Whileit is true that these reforms will need a certainamount of time to mature, we have alreadyseen a great deal of progress. For example, as aresult of the labour and fiscal reforms, 714,000jobs were created in 2014, one of the highestnumbers in the past 50 years.

The fiscal reform has also played an importantrole in strengthening the stability of Mexico’spublic finances, even in times of international

volatility. It has allowed the country to eliminatethe monthly increase in petrol prices and allocatemore resources to areas such as infrastructure,technology and scientific research.

Mexico’s energy reform has made it possibleto lower electricity rates in homes and industry.The electricity rates for the industrial sector fellfrom April 2014 to April 2015.

What other reforms have been implementedthat may indirectly affect the energy reform?To strengthen the institutional and democraticregime of the country, political reforms nowallow for the participation of independent can-didates in the election process and better mon-itoring of federal resources.

For the first time in the country’s history,gender equality is present in the registration ofcandidates for both federal and local legislators.Also, the Transparency and Access to Public In-formation Law and the National Anti-Corruption

System were recently approved. These measureswere enacted to strengthen the Mexican state´scapacity to overcome situations that have anaffect on public institutions.

How do you intend to increase investor confi-dence in Mexico regarding issues of security,particularly in the country’s northern states?Mexico has become a highly attractive destinationfor both domestic and foreign investment. In2013 and 2014, it received more than $66.7billion in foreign direct investment, an increaseof around $24.2 billion from 2011 and 2012.

To continue building trust with investorsand allowing Mexicans to live more peacefully,it is necessary to reinforce the country’s securitymeasures. My administration has put into placethe Public Security Policy and Law EnforcementInitiative, which increases collaboration betweenall levels of authority. As of 2015, we have neu-tralised 93 of 122 relevant criminal objectivesidentified by this administration, most of themwithout a single shot being fired.

How does the 2015 US-Mexico joint task forcecollaboration on climate change policy issuesfit into the nation’s energy activities?In March 2015, at the UN Framework Conventionon Climate Change, Mexico committed to re-ducing the effect of greenhouse gases by 22percent and black carbon emissions by 51percent by 2030. We are currently the only de-veloping country to make this commitment,which will also serve to strengthen the US-Mexico joint venture task force, implementedas a means of combating climate change.

Pemex has shown its commitment to thisventure by implementing measures to produceclean, sustainable energy. The company has sig-nificantly reduced gas flaring and carbon dioxideemissions. It has also constructed key refineriesto enable the production of ultra-low sulphurdiesel. In 2015, we will begin incorporating theuse of this fuel in the country.

A development strategy for electricity co-generation projects, in which steam and naturalgas will be used in the new installations insteadof fuel oil, has also been initiated. These areconcrete examples ensuring Mexico will have agreener and more sustainable energy future.

As a result of thelabour and fiscal reforms,714,000 jobs werecreated in 2014, one ofthe highest numbers inthe past 50 years.

IN FIGURES

Combined FDI Mexicoreceived in 2013 and 2014

More than $66.7 billion Mexico’s targeted reduction in greenhouse gas emissions by 2030

22 percentMexico’s targeted reduction in black carbonemissions by 2030

51 percent

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President Enrique Peña Nieto, who has guided Mexico through the energy reformprocess, discussed with TOGY the steps being taken to ensure a stable future forboth the nation and foreign investment. The reforms implemented have alreadybegun to take effect, with an increase of $24.2 billion in the combined foreigndirect investment (FDI) of 2011 and 2012 to that of 2013 and 2014.

Mexico’s energy policy reformation

Enrique PEÑA NIETOPresident of Mexico

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How will Mexico meet its goal of bringing in$50 billion in oil and gas investment by 2018?The opening of the industry to private investmentand its subsequent growth pose important chal-lenges that Mexico must overcome.

The availability of labour, the enforcementof national content and the strengthening ofregulatory agencies are complex themes andprocesses and may present difficulties. However,the energy reform provides an answer.

In matters of transparency, clear rules forthe design, processing and licensing of contractsand assignments have been established. Thisalso applies to the management of oil income.The agreements, resolutions, drafts and licensingdecisions will all be made public.

Likewise, the Federal Electricity Commissionand state oil company Pemex will publish infor-mation about their dealings and those of theirsubsidiaries and affiliated companies.

The work of strengthening Mexico’s institu-tional framework is fully underway. New regulatorypowers have been assigned to the Secretariatof Energy and internal revenue and public creditthat will allow for greater oversight of regulations.

The National Agency of Industrial Securityand Environmental Protection of the Hydrocar-bons Sector will be in charge of industrial safetyand environmental matters. It will regulate andenforce bans on hydrocarbons extraction activitiesin established protected areas.

Has the national oil company received sufficientassets in the Round Zero and One tenders? Out of the resources Pemex asked for in RoundZero, the company obtained 100 percent of 2Preserves and 67 percent of prospective resources,ensuring its daily production at a rate of 2.5million barrels of oil per day until at least 2035.

Most of the resources assigned to Pemexare located in conventional basins, though theyalso obtained resources in deepwater and un-conventional formations as well.

How does Mexico intend to meet increasedindustry demand for skilled labour? The Strategic Programme of Human ResourcesTraining in Energy Matters, published on Sep-tember 30, 2014, establishes training initiativesthat will develop human capital and projects

that generate value for the Mexican energy in-dustry. The programme’s goal is also to identifymechanisms that will be implemented to develophuman resources in Mexico’s energy industryduring the period from 2015 to 2018.

With regards to national content, the reformwill establish obligatory requirements for assign-ments and contracts. The share of nationalcontent required will increase from 25 percentin 2015 to 35 percent by 2025. The Secretariat ofEconomy will define the methodology of meas-urements and compliance for this minimum.

In addition, the secretariat will manage thenew Public Trust to Promote the Developmentof National Providers and Contractors. This trustaims to provide special attention to small andmedium-sized enterprises for training, researchand certification processes to close gaps in tech-nical and quality skill levels.

What initiatives are being implemented to re-duce the cost of electricity in Mexico?The cost of electricity in the country is heavilydependent on the feedstock used by the country’spower generators. The energy reform aims toexpand gas use, because it is cheaper and emitsless carbon dioxide than oil-based fuels.

The eventual development of natural gasfieldsin Mexico will also allow us to reduce importsand meet the demand of the power generationsector. This, in conjunction with the enhancementof the national gas pipeline network and the ex-ploitation of Mexico’s shale reserves, representsfavourable conditions for national electricity pro-ducers and foreign investment.

What other aspects of the reform presentopenings for foreign and local investment?Besides the opening of the industry to privateinvestment for the exploration and extractionof oil and gas resources, the energy reform es-tablishes new operating models in the naturalgas and electricity markets.

The goal of this is promoting private invest-ment in Mexico and increasing the domestic in-frastructure for natural gas pipelines, power gen-eration capacity and transmission lines.

Additionally, a progressive opening of thedomestic petrol and diesel market is expectedto encourage a reduction in prices by 2018.

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The Secretariat of Energy has been instrumental in designing the rules andregulations of the country’s Energy Reform Act, passed on August 11, 2014. Nowthat the reform is being implemented, Mexican Secretary of Energy Pedro JoaquínColdwell has been tasked with setting the groundwork for energy independencein the years ahead. He spoke with TOGY about the ongoing reform process.

Instruments of change

Pedro JOAQUÍN COLDWELLSecretary of Energy

IN FIGURES

Energy Reform Act signed into law

August 11, 2014Pemex’s Round Zero take of total 2P reserves

83 percent Pemex’s Round Zero take of totalprospective reserves

21 percentPemex’s expected productionrate through 2035

2.5 million barrelsof oil per day

Clear rules for the design,processing andlicensing ofcontracts andassignments havebeen established.This also applies tothe management of oil income.



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In recognition of much-needed process overhauls in Pemex’s 77 fuel storage facilities, thenational oil company has allocated $230 million in 2015 to the maintenance and upgrade ofthe Integrated System for Measurement, Control and Operations of Terminals (SIMCOT) andthe Gas and Fire Detection and Alarm Systems (SICCI). The SIMCOT-SICCI project bringstogether five of the Mexican energy industry’s leading automation players to supply and installthe latest technologies in automated measurement and systems control.

With operating contracts under Pemex for two onshore oilfields and two gasfields, Diavaz DEP,the exploration and production subsidiary of publicly listed conglomerate Grupo Diavaz, is one ofthe most active services companies in Mexico. Its experience producing shale gas in the BurgosBasin and operating mature onshore fields have provided the company a valuable skill set for theyears ahead. Diavaz DEP has set its sights on the Round One tender in 2015, where it is wellpositioned to make the most of its experience and transition into a fully independent operator.

More than 60 years of operations in Mexico alone are testament to Schlumberger’s closeworking relationship with Pemex. In addition to the company’s hands-on involvement in nearlyevery hydrocarbons-producing basin in Mexico, it is responsible for compiling Mexico’s NationalData Repository and setting up the data rooms for the Round One tender. The contract, issued bythe National Hydrocarbons Agency in October 2014, allotted the company a brief three monthsto complete the task by the time the first bidding round was launched in December 2014.

Sierra Oil and Gas made history in September 2014, when it became the first independent ex-ploration and production player in Mexico. With more than $1 billion in financial backing andan ambitious bidding agenda for the Round One tender, Sierra Oil and Gas can be expected tomake a significant impact on the future of Mexico’s hydrocarbons environment. An experiencedteam of oil and gas professionals at the helm places the company in a strong position for thedevelopment of both onshore and shallow-water fields in the country.

The Pemex Office of Corporate Procurement (DCPA) has undertaken the monumental taskof streamlining the national oil company’s purchasing lines. Where once every Pemex divisionemployed separate procurement strategies, the DCPA now has the responsibility of organisingall of the company’s purchases into procurement categories that optimise purchasing power.The DCPA’s efforts towards increasing efficiency are a key representation of Pemex’s drivetowards becoming a productive entity ready to compete in the global marketplace.

PERSON OF THE YEAR

Enrique OCHOA REZA

The Federal Electricity Commission (CFE) has undergone a massiverestructuring process alongside national oil company Pemex and nowfaces competition for the first time. Enrique Ochoa Reza, directorgeneral of the CFE, has seized the opportunity to reduce the country’sreliance on inefficient fuels for electricity generation and to increasethe use of cleaner-burning and more cost-effective natural gas. TheCFE’s plans for an unprecedented 11 natural gas pipeline projects tobe tendered by the end of 2015 offers an indication of Ochoa’s com-mitment to a more efficient energy industry and a new electricity in-stitution that is ready to compete in an open marketplace.

DOMESTIC SERVICES COMPANY OF THE YEAR

DOWNSTREAM PROJECT OF THE YEAR

INTERNATIONAL SERVICES COMPANY OF THE YEAR

NEWCOMER OF THE YEAR

CORPORATE ENTITY OF THE YEAR



THE YEA

R IN REV

IEWM

EXICO AT A

GLA

NC

E

14

MEXICO AT A GLANCE


La Paz

Ensenada

Tijuana

Nogales

Hermosillo

CiudadJuárez

Chihuahua

Mazatlán

Durango

Torreón MonterreyMatamoros

Altamira

Tampico

San LuisPotosí

Guadalajara

LázaroCárdenas

Manzanillo

Oaxaca

Acapulco

Veracruz

TuxtlaGutiérrez

VillahermosaCoatzacoalcos

Campeche

Ciudad delCarmen

Merida Cancún

Reynosa

MEXICO CITY

USUS

MEXICOMEXICO

BELIZEBELIZE

HONDURASHONDURAS

NICARAGUANICARAGUA

COSTA RICACOSTA RICA

EL SALVADOREL SALVADORGUATEMALAGUATEMALA

Kilometres

0 400200 800

National capital

City

National boundary

State boundary

Maritime boundary

Gulf of Mexico

PACIFIC OCEAN

Gulf of California

POLITICSOfficial name: United Mexican States

Political system: Federal republic

Head of state: President Enrique Peña Nieto

Capital city: Mexico City

Administrative divisions: 31 states and one federal district

DEMOGRAPHYPopulation: 120,286,655 (July 2014 estimate)

Population growth rate: 1.21 percent (July 2014 estimate)

Languages: Spanish and indigenous languages

Unemployment: 4.7 percent (2014 estimate)

ECONOMYCurrency: Mexican peso ($1:MX14.66)

GDP (official exchange rate): $1.3 trillion (2014 estimate)

GDP (real growth rate): 2.4 percent (2014 estimate)

GDP (per capita): $17,900 (2014 estimate)

Inflation rate: 3.8 percent (2014 estimate)

Natural resources: Crude oil, natural gas, silver, copper, gold, lead, bismuth,

zinc, celestite, fluorspar, timber

Exports 2014: $406.4 billion

Imports 2014: $407.1 billion

Main industries: Food and beverages, tobacco, chemicals, iron and steel,

oil and gas, mining, textiles, clothing, motor vehicles, tourism

Major export partners: US (78.8 percent)

Major import partners: US (49.1 percent), China (16.1 percent), Japan

(4.5 percent)

GEOGRAPHYArea: 1,964,375 square kilometres

Coastline: 9,330 kilometres

Climate: Varies from tropical to desert

ENERGY2014 crude oil production: 2.43 million barrels of oil per day

2015 proven oil reserves: 9.71 billion barrels

2014 natural gas production: 58.1 bcm (2.05 tcf)

2015 proven natural gas reserves: 433 bcm (15.3 tcf)

2013 technically recoverable shale gas reserves: 15.4 tcm (545 tcf)

Sources: BP Statistical Review 2015, CIA World Factbook, EIA, Pemex, World Bank

© 2015 The Oil & Gas Year Ltd., The Oil & Gas Year Mexico 2015. All rights reserved.



THE OIL & GAS YEAR MEXICO 2015 OIL & GAS YEAR The Who’s Who of the Global Energy Industry MEXICO THE OIL & GAS YEAR ISBN 978-1-78302-100-0 9781783021000 Mexico’s energy policy

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