Mexico Oil & Gas Report

Providing expert analysis, independent forecasts and competitive intelligence on the oil and gas industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Oil & Gas Risk Reward Index, Market Summary, Economic Forecasts, Company Profiles, Competitive Landscape and Global and Regional Overview.

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Mexico Oil & Gas Report
Product Price
$1,295.00

BMI View: Mexico's historic energy sector liberalisation mark s the start of a fundamental shift for the country's hydrocarbons sector. Whilst it will b e a number of years before results are seen in the country's production and reserves data, over the long term t he reforms will bolster upstream activity and reverse a decade-long decline in production . Pemex ' s upstream activity will remain limited over the next two years amid the broad industry downturn.

Headline Forecasts (Mexico 2014-2020)
2014 2015e 2016f 2017f 2018f 2019f 2020f
e/f = BMI estimate/forecast. Source: EIA, BMI
Crude, NGPL & other liquids prod, 000b/d 2,779.3 2,590.6 2,412.5 2,353.2 2,407.1 2,493.4 2,561.5
Dry natural gas production, bcm 45.4 45.0 44.5 44.3 44.9 46.3 47.7
Dry natural gas consumption, bcm 73.3 76.9 81.5 87.3 91.6 94.8 97.7
Refined products production, 000b/d 1,409.1 1,276.6 1,289.4 1,302.3 1,341.3 1,408.4 1,429.5
Refined products consumption & ethanol, 000b/d 2,007.0 2,027.1 2,057.5 2,094.6 2,142.7 2,196.3 2,251.2
Brent, USD/bbl 99.50 53.60 46.50 57.00 62.00 65.00 71.00

Latest Updates And Key Forecasts

  • Mexican national oil company (NOC) Pemex will remain under significant financial and operational strain over the remainder of the year. Whilst the strengthening of crude benchmark prices over H116 helped stabilise the company's losses, the price of Mexican crude remains at historic lows, deeming the majority of its upstream operations unprofitable.

  • Our forecast for continued price weakness over the next several months will weigh on Mexico's already downbeat outlook, limiting investment into existing projects by Pemex. We therefore maintain our downbeat expectation for total liquids production in 2016 at -6.9% y-o-y implying a reduction of 180,000b/d this year. This compares to a decline of 6.4% y-o-y in 2015 and extends Mexico's overall losses for a 12th consecutive year.

  • A key objective of the company's new CEO, Jose Antonio Gonzalez Anaya, is that the NOC will accelerate efforts to clear its outstanding repayments and build investor confidence in the company as a viable contributor to future upstream developments. The farming out of deepwater assets and the USD4.2bn government bailout in April 2016 represents the start of a more concerted effort to set the company back on track. However, the NOC still needs significant capital to achieve its USD21.1bn financing program for the year.

  • The Mexican government's USD4.2bn bailout of Pemex underscores the state-owned oil company's continued struggles in the face of an elevated debt burden, sizeable arrears to oilfield service providers and limited liquidity. In order to limit an increase in its liabilities, Pemex will increasingly look at previously untapped methods of financing to satisfy its obligations. An example of this includes the USD1.2bn sale and leaseback agreement signed with US-based private equity fund KKR in June 2016. Moreover, the company's USD760mn Japanese 10-year bond issuance on July 15 at a rate of 0.54% will diversify the company's debt distribution away from its heavily-USD denominated profile, thereby reducing currency risk.

  • We affirm our long-held positive view for the accelerated development of natural gas pipelines in Mexico, with oil and gas pipelines set to continue expanding through 2017. Mexican consumption growth will remain strong over the coming years, driven by an expanding manufacturing sector and increased residential demand. We believe the major driver of this trend will be the government's efforts to expand the use of gas-fired thermal generation in the country's electricity mix, which will be increasingly fuelled by cheap gas imported from the US.

  • In July, the National Hydrocarbons Commission (CNH) approved contracts and auction terms for 15 shallow water blocks in the states of Veracruz, Tabasco and Campeche, marking the start of Round Two. The tenders will launch later in 2016 with the winner expected to be announced on March 22 2017.

BMI Industry View
7
Table: Headline Forecasts (Mexico 2014-2020)
7
SWOT
9
Oil & Gas SWOT
9
Industry Forecast
11
Upstream Exploration
11
Latest Updates
11
Structural Trends
11
Upstream Projects
19
Table: Mexico - Major Upstream Projects
19
Upstream Production - Oil
22
Latest Updates
22
Structural Trends
22
Table: Round One Development Timeline
29
Table: Oil Production (Mexico 2014-2019)
36
Table: Oil Production (Mexico 2020-2025)
37
Upstream Production - Gas
37
Latest Updates
37
Structural Trends
37
Table: Cost Per Well
41
Table: Gas Production (Mexico 2014-2019)
43
Table: Gas Production (Mexico 2020-2025)
44
Refining
44
Latest Updates
44
Structural Trends
44
Table: Mexican Refineries, Active And Proposed
45
Table: Pemex Downstream Spending Plan
47
Table: Refining Capacity and Refined Products Production (Mexico 2014-2019)
49
Table: Refining Capacity and Refined Products Production (Mexico 2020-2025)
50
Refined Fuels Consumption
51
Latest Updates
51
Structural Trends
51
Table: Refined Products Consumption (Mexico 2014-2019)
53
Table: Refined Products Consumption (Mexico 2020-2025)
53
Gas Consumption
54
Latest Updates
54
Structural Trends
54
Table: Gas Consumption (Mexico 2014-2019)
57
Table: Gas Consumption (Mexico 2020-2025)
57
Trade - Oil
58
Crude Oil Trade Forecasts
58
Latest Updates
58
Structural Trends
58
Table: Crude Oil Net Exports (Mexico 2014-2020)
61
Table: Crude Oil Net Exports (Mexico 2020-2025)
62
Refined Fuels Forecasts
62
Latest Updates
62
Structural Trends
62
Table: Refined Fuels Net Exports (Mexico 2014-2019)
64
Table: Refined Fuels Net Exports (Mexico 2020-2025)
64
Trade - Gas (Pipeline And LNG)
65
Latest Updates
65
Structural Trends
65
Table: Gas Net Exports (Mexico 2014-2019)
69
Table: Gas Net Exports (Mexico 2020-2025)
69
Industry Risk Reward Index
70
Latin America - Oil & Gas Risk/Reward Index
70
Table: Latin America - Composite Risk/Reward Index
70
Composite RRI: Continued Adjustments Level Off Rankings
71
Upstream RRI: Steady Scores Mask Forthcoming Shifts
72
Table: Latin America - Upstream Risk/Reward Index
73
Downstream: NOC Dominance Will Reinforce Fuels Deficit
75
Table: Latin America Downstream Risk/Reward Index
77
Mexico - Risk/Reward Index
78
Upstream Index - Overview
78
Downstream Index - Overview
79
Market Overview
80
Energy Market Overview
80
Overview
80
Government Policy
80
Licensing And Regulation
84
Table: First Bidding Round: Southern Region
84
Table: Second Bidding Round - Northern Region
84
Table: Third Bid Round - Chicontepec
85
Table: Tender Schedule For Mexico's Licensing Round One
86
International Energy Relations
88
Table: Mexico's Export Crude Grades
91
Oil & Gas Infrastructure
92
Oil Refineries
92
Table: Downstream Projects
94
Service Stations
95
Oil Storage Facilities
95
Oil Terminals/Ports
95
Oil Pipelines
96
LNG Terminals
96
Table: LNG Import Terminals In Mexico
97
Gas Pipelines
98
Competitive Landscape
101
Competitive Landscape Summary
101
Table: Key Energy Players
102
Table: Upstream Players
103
Table: Downstream Players
103
Company Profile
104
Pemex
104
Table: Major Upstream Assets In Mexico
105
Table: Key Financial Data (USDmn)
105
Regional Overview
107
Latin America Overview
107
Table: Latin America Oil and Gas Production, Refining Capacity and Trade, 2014-2025
118
Glossary
120
Table: Glossary Of Terms
120
Methodology
122
Industry Forecast Methodology
122
Source
124
Risk/Reward Index Methodology
124
Table: Bmi's Oil & Gas Upstream Risk/Reward Index
126
Table: Weighting
127

The Mexico Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Mexico including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's Mexico Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Mexican oil and gas industry.

Key Benefits

  • Benchmark BMI's independent oil and gas industry forecasts for Mexico to test consensus views - a key input for successful budgeting and strategic business planning in the Mexican oil and gas market.
  • Target business opportunities and risks in the Mexican oil and gas sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Mexico.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI’s key forecasts and industry analysis, covering oil and gas reserves, supply, demand and refining, plus analysis of landmark company developments and key changes in the regulatory environment.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the upstream and downstream sectors and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast:

  • Pricing: Oil price (USD/bbl, WTI, Brent, OPEC basket, Urals); oil products prices (unleaded gasoline, gasoil/diesel, jet/kerosene – USD/bbl) at global hubs.
  • Production, Consumption, Capacity & Reserves: Proven oil reserves (bn barrels), production, consumption, refinery capacity and throughputs (‘000b/d); proven gas reserves (tcm), production and consumption (bcm) and fuels trade.
  • Imports & Exports: Crude oil exports/imports (‘000s b/d) and value of crude oil trade in USD. Fuels exports/imports (‘000s b/d) and value of fuels trade in USD. Natural gas imports/exports (bcm), by pipeline and/or LNG, and value of natural gas trade.

BMI’s Oil & Gas Risk Reward Index

BMI’s Risk Reward Indices provide investors (independents, NOCs, IOCs, oil services companies) looking for opportunities in the region with a clear country-comparative assessment of the upstream and downstream market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Market Overview

A profile of the upstream and downstream sectors, including analysis of reserves, output, consumption and trade of energy products; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.

Competitive landscape

Comparative company analyses by USD sales, % share of total sales, number of employees, year established, ownership structure, oil production (‘000b/d), gas production (bcm), downstream capacity (‘000b/d) and % market share.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Regional Overview

Regional perspective on size and value of the industry. Plus comparative rankings by production, refining, imports and exports of oil, gas and LNG.

Global Oil Market & Oil Products Outlook

Based on our country coverage of over 99% of global oil and gas production and consumption, BMI provides demand, supply and price forecasts to end-2024 for oil, gas and oil products.

Sources

The Oil & gas Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.