Wednesday, March 6, 2019

The Road To Mexico

When Mexico implodes: link here. Tracking:
The Mexican Peso Crisis, 1994. At wiki.

Rapid depreciation, 2015: link here.

Gasoline prices, January 1, 2018: Mexican government no longer sets gasoline prices; determined by market. It appears gasoline in Mexico costs about what it costs in California (4/19).

AMLO assumed office, December 1, 2018.

Peso History (link here):

Updates

August 23, 2019: no growth, 2Q19

June 22, 2019: says "no" to deepwater

June 14, 2019: AMLO cancels auctions to choose partners for joint ventures

June 6, 2019: Pemex -- junk status

May 27, 2019: AMLO is seeking $7.3 billion in tax breaks for Pemex for calendar years 2020 and 2021. Obviously an unspecified tax break has already been granted for 2019.

May 22, 2019: nice update on Mexico; things are probably worse than we realize;

March 6, 2019: Mexico will depend on US natural gas despite energy sovereignty push. Link here. My hunch: Mexico will be importing more natural gas and more refined products from the US four years from now that what it imports now.
U.S. natural gas pipeline exports to Mexico have been growing, thanks to expansion of cross-border pipeline capacity, the EIA has estimated. The rise of liquefied natural gas (LNG) exports and pipeline exports to Mexico resulted in the United States being a net natural gas exporter for the second year in a row in 2018. Exports of natural gas to Mexico by pipeline exceeded 5 Bcf/d in July 2018, the EIA said earlier this year.
February 4, 2019: Mexico ends green energy initiatives. Renewable industry stunned.

Original Post
 
The "road-to-Mexico" tag is here. Mid-February, 2019, these recent posts:
The tea leaves suggest Pemex is at best on life support in the ICU.

By the way, before I forget, has anyone seen the most recent headlines regarding the surge of illegal immigrants coming across the southern border?  These are the headlines in the last 24 hours -- one seventeen minutes ago -- (note the sources: Washington Post, NPR, and Axios):


If Pemex fails, Mexico fails, and Mexico will look a lot like Venezuela.

But I digress.

Back to the road to Mexico.

Platts is reporting that Mexico's decision to delay auctions on new oil and gas development until at least 2021 will result in billions of dollars in revenue losses and significantly stymie new production over the next decade, according to a member of the country's National Hydrocarbon Commission said Tuesday.

Another digression: we will probably never know but my hunch is that Commissioner Hector Moreira Rodriguez' time on the commission is soon to come to an end.

From the linked article:
  • delays in the country's oil and natural gas auctions will delay the new president's oil, gas proudciton goals
  • production exceeding 2 million bopd are now seen as unrealistic (put that in perspective: four small counties in North Dakota could produce 2 million bopd if unfettered)
  • it appears that Mexico will be "lucky" to hold output at 1.6 million bopd through 2024
  • every year, Mexico delays a bidding, it costs the country $1 billion 
  • in December, 2018, the new president said that Mexico would halt its hydrocarbon auction rounds by three years
    • really, really bad timing, because right now, the US more than ever, needs heavy oil that Mexico could provide 
There's an essay in a recent WSJ Review, page C6, February 16 - 17, 2019, featuring Jim Collins, a business guru known for his best-selling books Built to Last, Good to Great, and "other staples of the corporate bookshelf."

He's 61 years old. He's been around. He taught management at Stanford University in the 1990s. He is known for something called "Level 5 leadership."

Near the end of that essay:
Mr Collins, whose principles include "confront the brutal facts," is facing some of his own. He's afraid of disease (he recently lost two close friends to cancer) and is concerned that there might be a stretch of political or global turbulence ahead that none of us can accurately predict."
I'm thinking maybe Mr Collins might want to take a six-month sabbatical to study the southern border.

The Immigrant Song, Karen O with Trent Reznor and Atticus Ross

2 comments:

  1. Personally lacking in research in this, so I'll rely on you,Bruce!
    Who exactly would be buying up these Mexican Leases? The Cartels? Do they work the same as in the US, private landowners negotiate with Oil Comp.?
    Is there such a thing as private land ownership in Mexico?
    Just curious

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    Replies
    1. Great question. I talked with a Texas oil company representative whose company was interested in leasing/buying/acquiring minerals in Mexico. He was surprised to find that there is no private ownership of minerals in Mexico. Owned by the federales (the federal government).

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