Mexico Energy - June 2014

I nves tm en t opportunities in th e ne w e ra

Alstom

Interested in modernizing Mexico’s electric transmission network

Mexico

Opening its doors to Canadian expertise and investments

Expanding the GDP by 1.4% with the aid of the private sector

National Infrastructure Plan Vol. 1 No. 4 June 2014

Marketing energético

MANOLO GUTIÉRREZ Proximity Cordinator mgutierrez@lideresmexicanos.com www.ferraezconecta.com

Letter from the Editor

Mexico Energy and Business Magazine Volume 4 june 2014 Publishers

Managing editor

Reporters

W

José Manuel Escobedo

Maribel Zavala, José Tepezano Laura Sánchez Acuña and Abel Reyes

Photography

While government

officials begin discussions and debate 21 secondary laws expected to be approved by mid-July according to president Peña Nieto, the private sector has made it clear -- investing in Mexico today is a top priority. The premise is simple, if there is energy, there will be opportunities.

In Mexico’s National Infrastructure Plan (PNI) for 2014-2018, a sum of nearly 4 billion pesos is geared to the energy industry, and the good news is that 1.1 billion pesos comes from the private sector. As we report in Closing the Gaps in Mexico’s Energy, company directors believe that transforming hydrocarbon resources into value will generate revenue, and energy reform can be the denominator that attracts investments.

For many years, international companies have been loyal to Mexico’s progress and development, and they are maintaining this loyalty. Such is the case of Alstom, which for the past 16 years has participated in several energy projects. Today, Alstom wants to take part in investments that will increase Mexico’s capacity to generate electric energy. In an interview with Patrick Kron, president of Paris-based Alstom, he says he is optimistic that Mexico’s future will bring many opportunities for the company.

Canada is another country interested in being part of Mexico’s energy transformation. Earlier this month, a delegation of Mexican government and business officials visited Calgary to court Canadian expertise and investment.

At the Mexican Petroleum Congress (CMP), Petróleos Mexicanos (Pemex)’s general director Emilio Lozoya and Mexico’s Secretary of Energy Pedro Joaquín Coldwell, offered insight into the new stakeholders participating in the petroleum industry. Coldwell said that Mexico is at the beginning of the biggest transformation the country’s energy sector has seen in over 70 years.

I happen to agree with him.

Sincerely,

José Manuel Escobedo Reachi Managing Editor jescobedo@latinoleaders.com (214)- 206-4966 ext. 227 2

Raúl Ferráez & Jorge Ferráez

June 2014 Mxe Mexico Energy and Business Magazine

Editor in Chief Co-editor

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Milton Méndez Maribel Zavala Rivas

Pamela Rogers

Fernando Izquierdo Romero Rodrigo Valderrama Viveros Carlos Cuevas Martínez Luis Enrique González Piceno

Cathy Lopez Claudia Garcia Bejarano Carlos Anchondo

Gabriel Torres Origel Javier Senderos Francisco Abad Carlos Pozos

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INDex

Cover story

Goals to Reach At the Mexican Petroleum Congress (CMP) Petróleos Mexicanos (Pemex)’s general director Emilio Lozoya and Mexico’s Secretary of Energy Pedro Joaquín Coldwell offered insights into the new stakeholders that will participate in the petroleum industry. Coldwell indicated that Mexico is at the beginning of the biggest transformation the national energy industry has had in over 70 years.

06 Business Updates 10 The Potential of Renewables In Mexico renewable energies are still underutilized despite the great potential of solar energy, wind, and geothermal the country offers. The potential of renewable energies was the focus of a presentation by the Global Institute for Sustainability (IGS), Tecnológico de Monterrey, Santa Fe campus, in which it presented its publication Renewable Energies for Competitiveness in Mexico, the result of three expert panels on the subject.

14 Closing the Gaps in Mexico’s Energy

Mexico’s National Infrastructure Plan (PNI) for 2014-2018 is a good sign for the economy and for the private sector. Of the 7.7 billion pesos, 3.9 billion pesos are set aside for the energy sector. An historic amount of investment that would expand the Gross Domestic Product (GDP) between 1.3 percent and 1.5 percent, experts point out that these investments have yet to materialize.

20 The French Connection

For the past 16 years, Alstom has had an important role in several energy projects in Mexico and now that the Energy Reform has opened the doors to more revenue, the company is looking forward to take part in investments to increase the country’s capacity to generate electric energy, says Alstom president, Patrick Kron.

4

June 2014 Mxe Mexico Energy and Business Magazine

10 26 Mexico pitches newly reformed energy sector for Canadian investment Mexico is

opening its doors for Canadian companies to participate in its energy sector. Early this month a delegation of Mexican government and business officials went to Calgary to court Canadian expertise and investment.

37 Calendar of Events

Portada

Mxe

Business Updates Mexico’s Pemex: no loss on Repsol stake, remaining shares to be sold

BOEM awards leases in US-Mexico transboundary area to ExxonMobil

Mexico’s state-owned Pemex oil company says it made some financial profit on its aborted alliance with Spain’s Repsol.

Pemex director Emilio Lozoya says Pemex sold off almost all of its 7.85-percent stake in Repsol at an average price of 20.10 euros ($27.54).

That’s just 0.75 percent above the 19.95 euro price that Pemex paid in 2011. Pemex said it made profits from financing and swaps of about $900 million.

Pemex said it had been seeking strategic and financial returns on the investment, but Repsol had shown “a lack of interest.”

Lozoya said Wednesday Pemex would continue to seek international alliances, and use the proceeds from the sale to invest in its portfolio of exploration, transport and industrial projects.

The sale price was estimated at about $2.2 billion euros ($3 billion).

The US Bureau of Ocean Energy Management has awarded the first three oil and gas leases in the Gulf of Mexico area subject to the US-Mexico Transboundary Hydrocarbons Agreement to ExxonMobil Corp., which bid for the blocks during Western Planning Area Sale 233 in August 2013 (OGJ Online, Aug. 28, 2013).

The leases lie in the Alaminos Canyon area, about 170 miles east of Port Isabel, Tex., and will be subject to the terms of the agreement when it becomes effective on July 18.

BOEM opened the three sealed bids totaling more than $21.3 million during March’s eastern and central gulf lease sales (OGJ Online, Mar. 19, 2014).

The agreement clarifying development of transboundary resources, signed into law in December, unlocks about 1.5 million additional acres of the US Outer Continental Shelf for exploration and production activities. BOEM estimates the area has as much as 172 million bbl of oil and 304 bcf of natural gas.

“With the agreement now in full force, we can make additional oil and gas along the resource-rich boundary between the United States and Mexico available and we have a clear process by which both governments can provide the necessary oversight to ensure exploration and development activities are conducted safely and responsibly,” said US Sec. of the Interior Sally Jewell.

Associated Press

Oil & Gas Journal editors

Iberdrola will invest 5 billion dollars in Mexico Reuters

The Spanish utility company is looking to invest over a sixyear period. The company has already invested 1.5 billion.

“We signed an agreement in Mexico recently that in this six-year term, we will invest 5 billion dollars. While 1.5 billion dollars have already been invested in construction, 6

June 2014 Mxe Mexico Energy and Business Magazine

Portada

Mxe

Business Updates we are not talking about something in the air,” said Ignacio Sánchez Galán, Iberdrola’s president, during an event scheduled for Mexican President Enrique Peña Nieto’s and other officials’ visit to Spain.

“We are building power plants, combined cycle power plants, wind power plants, and potentially solar…We are also open to participating in pipeline projects,” he added.

Sánchez Galán also said that while Mexico develops its reforms with which it expects to extract its potential hydrocarbon reserves, the company has set up gas storage in Texas and the United States to serve Mexico and ensure the supply of gas from its neighbor in the north.

Portugal’s Energy Experience Will Help Mexico: Peña Nieto Excelsior

The Mexican president believes that the relationship between the two countries could result in a major transcendence in the field of energy.

President Enrique Peña Nieto considers that Portugal’s technical experience in energy can be of great relevance for Mexico to take better advantage of its petroleum potential in deep water and develop clean energies.

He considers it admirable that more than 80 percent of Portugal’s electric energy is generated from renewable sources, which “is an example for the world to follow in its search for real solutions to the challenges of climate change.”

“Because of this, we are convinced that Portugal and Mexico can build a new friendship bridge of cooperation and prosperity between Latin America and Europe,” he emphasized during his speech.

Energyboardroom.com Releases New Mexico Oil and Gas Report Energyboardroom

The new report from EnergyBoardroom on the Mexican oil and gas sector, available today for free download, http:// www.energyboardroom.com/country_reports/mexico-oilgas focuses on the shifting energy dynamic between Mexico and its North American neighbors, and asks what this will bring to the future of the country’s oil and gas sector.

It also explores the practicalities of the new energy reform, looking at what has changed in real terms for investors. ● 8

June 2014 Mxe Mexico Energy and Business Magazine

Laura Sánchez Acuña

EFE Agency

laurasan11@gmail.com

The Potential of

Renewables June 2014 Mxe Mexico Energy and Business Magazine

Even though renewable energies have proven to be profitable and competitive for power production, in Mexico they are still underutilized despite the great potential of solar energy, wind, and geothermal the country offers. Now, we turn to the priorities of the new energy regulations that forecast that by 2024, 35 percent of the power generation will come from these sources.

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The potential of renewable

energies was the focus of a presentation by the Global Institute for Sustainability (IGS), Tecnológico de Monterrey, Santa Fe campus, in which it presented its publication Renewable Energies for Competitiveness in Mexico, the result of three expert panels on the subject.

According to IGS Director Isabel Studer, the publication, which has been widely distributed to legislators across Mexico, includes an analysis of the present state of renewable energies, its challenges, and opportunities as energy sources as well as policy recommendations for legislators for the Energy Reform.

“We would like them to take into consideration that it is a diverse panel, that we are not representing a renewable energy association or private interests, but that the views represent those of a group of experts who are extremely concerned with the topic. Felipe Calderón’s administration made renewable energies a priority but did not meet its own goal of achieving 8 percent in power generation by the end of his term. There is something in the public realm that is causing this to fail.”

June 2014 Mxe Mexico Energy and Business Magazine

An Attractive Investment Sector

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For 20 years, according to Gauss Energy’s general director Héctor Olea, private investors, national and international, have invested more than 42 billion dollars in power generation using conventional technologies, combined cycles, and even solar projects that are still in operation. Meanwhile investments in renewable energies during the last 6 years were around 8 billion dollars in projects that are still operating, not under construction, or in planning.

“Solar energy has approximately a billion dollars of investment scheduled to produce roughly 500 MW of energy in development zones or those under construction or already operating such as the case of Aura Solar,” a solar photovoltaic energy project inaugurated in Baja California Sur. Olea says the new regulatory framework that the federal government has proposed is going in the right direction.

“It is a law that in reality will modernize, make more efficient, and establish competitive conditions effective immediately, but we are worried that the new policy regime will set up stumbling blocks for new investment flows and see a slow-down in new private investment participation that is already taking place in Mexico.”

A great uncertainty surrounds the long period required to establish the legal foundation and energy regulation, in addition to the institutional changes that are necessary to create a modern and competitive power market as proposed by the Mexican Electricity Law. Because of this, Studer emphasizes that it is a priority that a transition period be established of at least three years in which measures that have previously been allowed to develop renewable energies continue. The time period would pro-

vide ample opportunity for the Energy Regulatory Commission (CRE) to review pending contracts.

The objective is not to slow down those investments that have already been attracted to the expectations created by the Energy Reform, but that they continue.

In her opinion, the Energy Reform’s opening of the power sector is a smart move because it ends the role of “sole buyer” that the Federal Electric Commission (CFE) presently holds and allows greater private sector investment to modernize the industry. Investments in transmission and distribution networks are essential for renewable energy to connect supply and demand.

“The Mexican Electricity Law offers a modern vision for the competitive energy sector; however, it is a law in transition because the process of dismantling the CFE’s dominant role will take time.”

Hence, the role of regulators such as the CRE will be essential and should be autonomous to guarantee a competitive market, “where tariffs are defined on the basis of technology, not on political considerations which is what we have had until now; that these tariffs reflect the cost of electricity so that they can allow renewable energy to participate on the basis of competitiveness and on a level playing field.”

In addition the National Energy Control Center (CENACE) should operate the nation’s electric system as a neutral body, guaranteeing renewable energy projects access to sell their electricity.

Maribel Zavala y José Tepezano

June 2014 Mxe Mexico Energy and Business Magazine

Closing the Gaps in Mexico’s Energy

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Mexico’s National Infrastructure Plan (PNI) for 2014-2018 is a good sign for the economy if you take into account that out of 7.7 billion pesos, 3.9 billion pesos are set aside for the energy sector. Of these, 2.8 billion pesos are investments from the federal government and 1.1 billion from private investors. An historic amount of investment by any account that would expand the Gross Domestic Product (GDP) between 1.3 percent and 1.5 percent, experts point out that these investments have yet to materialize.

June 2014 Mxe Mexico Energy and Business Magazine

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G

uillermo Pineda, a leading partner in energy for PricewaterhouseCoopers (PwC), considers that “there are still a lot of things to do. Not only does the Energy Reform initiative have to go forward, but also we have to anticipate further actions. With GDP growth at this level, the government will obviously follow through on those activities that it has committed to and that are scheduled to take place.”

Pineda says there are large investments in four “oil producing states: Campeche, Veracruz, Tabasco, and Tamaulipas,” the message remains very clear. Exploration and production activities will continue to be financed although complemented by private investors.”

Giovanni Aloi, vice-president of the Confederation of Industrial Chambers (CONCAMIN), says “if there is energy, there will be opportunities. If there is not any energy, we might as well be talking about the Stone Age. We have the capacity to be self-sufficient in energy, and infrastructure development will generate self-sufficiency for the federal government to provide resources in other areas.”

Similarly, Gerardo Salazar Vieza, director of Banco Interacciones, assures Petróleo&Energía that “the Plan is very promising for banking; in addition to including a sum of 7.7 billion pesos, 4 out of every 10 pesos

in the plan will be invested by the private sector, this will help attract more investment in the country.”

“In fact, even without the National Infrastructure Plan, we (Banco Interacciones) are seeing great investment opportunities in Mexico. We are already analyzing 57 infrastructure projects that involve financing up to 15 billion pesos,” adds Salazar.

However, José Enoch Castellanos Ferez, president of the Pemex Steering Commission of the National Chamber of the Transformation Industry (CANACINTRA), discussed the implications of the announcement.

“Economic development implies many factors. We believe that the Energy Reform can be the denominator that attracts investment and will generate revenue. Obviously, building infrastructure to extract hydrocarbons, but above all transforming hydrocarbon resources into value, will generate revenue.

President Enrique Peña Nieto introduces the National infrastructure Plan to Mexico’s state governors.

“The basic point is that if you produce more, you need to have sufficient ports to export. It has been announced that close to 60 billion pesos have been invested to modernize the port of Veracruz and triple the number of its berths.”

June 2014 Mxe Mexico Energy and Business Magazine

Covering all the sectors

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The investments predicted by the PNI 2014-2018 are expected to increase petroleum production, currently at 2.5 million barrels per day, to 3 million barrels per day within four years. Thus, the Energy Reform expects a total investment in exploration and extraction of 2.4 billion pesos, of which 1.7 billion are invested by Petróleos Mexicanos (Pemex) and the rest by the private sector, according to the Secretariat of Energy’s data.

In relation to pipelines, an investment of 227 billion pesos is targeted to build almost 10,000 kilometers. (6,213 miles).

“Imagine that the industry has all the gas that it needs. How much money would that generate?” asks Aloi. Let’s suppose that private companies invest, instead of the state, how much would the government save? With these two scenarios, we can only imagine what is going to happen in the country, a real transformation.”

On the subject of refineries, Pemex will invest 161,859 billion pesos in two principal areas: the reconfiguration of the Salamanca and Tula refineries and improvements in the quality of Mexico’s National System of Refineries’ combustibles.

Twenty one billion pesos is targeted to produce 1.1 million tons of petrochemicals annually, benefitting the production chains connected to developing solvents, synthetic rubbers, explosives, polyester, bags and packages, antifreeze, fertilizers, resins and fibers, among others.

As far as the budget for fertilizers is concerned, Pemex will invest 15 billion pesos to produce an additional 480,000 tons of ammonia and up

to a million tons of urea, which will meet close to 75 percent of the national demand and it will discontinue annual imports of USD 400 million.

For CANACINTRA’s Castellanos Ferez, it is important “to go back and reactivate a production chain for fertilizer production using natural gas, ethane, and ammonia; to generate ethylene production to produce plastics, particularly polyethylene. Despite the fact that there is considerable private sector investment in the southeast, in Coatzacoalcos, the country is unable to produce the million tons of polyethylene that it needs.”

Regarding electricity, the Federal Electricity Commission (CFE) will require an investment of 310 billion pesos in generation projects and 58 billion pesos in transmission grids and thus create an additional 25,000 MW - of which 16,000 MW will enter into operation during the six-term administration.

If we talk about Pemex in general, we know that its infrastructure requires extensive modernization, (it has been roughly 40 years), but the opportunity is there; with or without an Energy Reform, with or without the investments mentioned in the PNI, the opportunities already exist,” confirmed overwhelmingly Miguel Angel Valdespino, division manager of Oil & Gas de Schneider Electric México. ●

Alstom

Maribel Zavala

Alstom

June 2014 Mxe Mexico Energy and Business Magazine

The French Connection

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In the next 15 years, according to Mexico’s Ministry of Energy, Mexico will need investments to increase its capacity to generate electric energy to 47,000 MW, totaling an investment of 120 billion dollars, including transmission and distribution infrastructure – and Alstom wants to be a part of this.

Kron tells Petróleo&Energía that in Mexico his strategy focuses on participating in the modernization of the electric energy transmission network, “by helping increase the energy mix and making us less dependent on fossil fuels, reducing contaminating emissions in the environment, incorporating new combined cycle power plants, and modernizing old plants or at least, using new gas turbines.”

Alstom’s strong presence in Mexico

Patrick Kron

June 2014 Mxe Mexico Energy and Business Magazine

Alstom President

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W

hile the electric sector will grow 4.5 percent by increasing the use of renewable energy sources with “Smart Grid” technology, the French-born Alstom president Patrick Kron, says that the future will bring many opportunities but that “investments will depend on the projects that are awarded to us, given that we are already participating in licensing processes where our technology is required.”

Regarding energy transmission, Alstom has created a network system capable of transporting high levels of energy long distances without losses, due to the “Smart Grids” technology. In this context, the company plans to participate in the development of a national power transmission network by trying to make the existing system more efficient, increasing its capacity, and decreasing the losses of transported electric energy.

Alstom has had an important role in several energy projects for the past 16 years in Mexico. “For example, the business section of Alstom Power has participated in the building, outfitting, and maintenance of energy plants producing close to 11,000 MW, which represents almost 20 percent of electric generation in Mexico.”

Kron remembers several projects, such as “Laguna Verde in Veracruz (1,634 MW) which in 2007 consisted in the rehabilitation and modernization of vapor turbines, new electric turbo generators, that resulted in a 20 percent increase in its capacity to generate nuclear energy.”

“In 2009, the project Los Humeros II in Puebla (50 MW) with a turnkey strategy, consisted in building a new geothermal energy plant. In the same year, the Mazatlán project consisted in providing electrostatic precipitators to one thermal electric plant, achieving a 90 percent decline in contaminating particulate emissions in the environment.”

The president of Alstom also talked about how in 2010, “the Manzanillo project (600 MW) consisted in the modernization of steam turbines to upgrade the power plant.”

June 2014 Mxe Mexico Energy and Business Magazine

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Another project that was carried out was the Sauz in Querétaro (219 MW), which provided a new GT24 turbine and the retrofitting (upgrading and modernizing) of the steam turbines, which extended their life by 25 years and generation capacity by 20 percent, and included seven years of service and upkeep.

“Last year we were selected to supply and place in production the latest 34 ECO 100 wind turbines in the La Central Eólica Sureste II (Eólica Southeast II) wind farm in Oaxaca and the turnkey project to build the La Central Geotérmica (geothermal plant at Los Humeros III) in Puebla.”

“This year we will convert petroleum coke to combustibles from the central thermal power plant at Altamira in Tamaulipas,” assures Kron.

Innovation in the Moment Alstom supports Mexico’s priorities toward a sustainable path. Kron says that more than 85 percent of the electricity generated uses fossil fuels. “Twenty percent of the power plants that form the national energy grid are obsolete, a situation that has become inefficient, highly contaminating, and causes a tremendous impact on the environment and health.”

“Energy sustainability is one of the most important challenges we face globally. One in five persons experiences electricity losses in their homes and businesses. Renewable energies are clean, but they only represent 20 percent of the electricity generated globally,” says Kron.

Efficient transportation systems are important to environmental sustainability, an area in which Alstom has played an important role.

Kron admits that Alstom is interested in participating in the new rail infrastructure projects announced by the federal government, such as the México-Toluca and MéxicoQuerétaro routes, as well as the Línea 3 (Line 3) of the Guadalajara Metro System.

Investments in rail passenger transportation are an important step to make Mexico a more competitive country and the need to modernize the transportation system in general; it is, without a doubt, a very important investment,” says Kron.

“At Alstom we are waiting to find out how to participate in these projects in order to make our offers on the electromechanic part and rolling stock, that is, the trains,” says Kron. ●

Canada

Mexico pitches newly reformed energy sector for Canadian investment

June 2014 Mxe Mexico Energy and Business Magazine

Mexico is laying out the welcome mat for Canadian companies to participate in its energy sector, which is opening up to outside investment after more than 75 years of government control.

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A

delegation of Mexican government and business officials came to Calgary early this month to court Canadian expertise and investment. The country has huge untapped oil and gas potential in tough-to-access shale formations, but its state-run oil firm, Petroleos Mexicanos (PEMEX), doesn’t have the financial wherewithal or technical know-how to exploit it.

Mexico’s production has been in sharp decline for the past decade, and the reforms are meant to ensure it can export more than it imports in the years ahead, said Leonardo Beltran Rodriguez, Undersecretary of Planning and Energy Transcription at Mexico’s energy department.

“Mexico is fully committed to the transformation of the energy sector and if we are to take advantage of these resources, we can do it with many people,” he told a Calgary business crowd.

“But better we do it with friends.”

The energy reforms were passed by Mexico’s Congress in December, but still require a raft of secondary legislation to become fully implemented.

Calgary was the first city in which the Mexican officials made the pitch – even before stops in Houston or New York.

The reforms aim to end PEMEX’s monopoly over oil and gas development and Comision Federal de Electricidad’s control over the power sector by the end of next year. Both will still be owned by the government, but the goal is for them to operate more like corporations.

June 2014 Mxe Mexico Energy and Business Magazine

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A report by the Canada West Foundation and Mexican economic think-tank Insituto Mexicano Competitividad released Monday says the biggest opportunities for international players can be found in Mexico’s shale oil and gas frontier, potentially drumming up business for Canadian service and equipment companies.

“Canada’s strong position in the energy sector and its political, geographic and economic ties to Mexico could benefit Canadian companies across the value chain,” said the report.

Last year, Mexico produced 2.5 million barrels per day of oil, down from 3.4 million barrels in 2004. But its potential to grow its crude production from so-called tight oil plays – where it’s difficult to make the oil flow to the surface by conventional means – is formidable. It’s believed to have the fifth-largest tight oil resource potential in the world, according to the report.

Meanwhile, Mexico imported 1.3 billion cubic feet per day of natural gas last year to meet burgeoning demand from the energy sector. It’s currently the world’s 18th largest producer, but that, too, has the potential to grow significantly thanks to technological advances. Mexico is believed to have the world’s sixth largest technically recoverable shale gas resources.

Mexico is aiming to complete new environmental regulations for shale oil and gas within the next two or three months, said Galo Galeana Herrera, director general of energy and extractive activities.

It’s drawing some lessons from the U.S. experience with hydraulic fracturing, or fracking – the controversial method used to extract oil and gas from rock formations deep underground. For instance, baseline studies are being done on air quality, aquifers, biodiversity and soil ahead of time, he said.

There’s a lot about Mexico that could be attractive to Canadian firms, said Carlo Dade, with the Canada West Foundation.

“Mexico’s something we’ve had our eye on for awhile as an opportunity,” he said. For instance both countries are members of the North American Free Trade Agreement and are neighbors with the United States.

However, the report flags some risk factors, such as uncertainty over how the energy reforms will be executed. Crime and violence is also an issue in some of the areas with shale potential.

An “unintended consequence” of increased Mexican production could be more intense competition with Canadian oil sands crude in the market, the report said.

One of the rationales for the stalled Keystone XL pipeline, cited by its supporters, is its potential role in displacing waning Mexican and Venezuelan heavy oil imports to the U.S. Gulf Coast with a steady supply from Canada.

U.S. imports from Mexico are down 41 per cent over the past six years, while imports from Canada are up by 25 per cent.

“If Canadian services help to rehabilitate the Mexican industry, Canadian sales expectations to the U.S. might have to be revised,” the report says. ● The article was published in The Canadian Press and written

by Lauren Krugel.

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Also, during the year we will be increasing our distribution volume, which currently stands at 25,000 copies. This will allow us to expand our coverage. Our readers can also benefit from our web page and our exclusive business community called POTENTIA. Other benefits include: • The 5th luncheon/banquet honoring the 1OO leaders in the energy sector in Mexico. (March 4).

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G oa l s to Reach At the recent Mexican Petroleum Congress (CMP) in Acapulco, Petróleos Mexicanos (Pemex)’s general director Emilio Lozoya and Mexico’s Secretary of Energy Pedro Joaquín Coldwell offered insights into the new stakeholders that will participate in the petroleum industry and the new investment flows that will launch the sector.

L

“In this transformation process of Mexico’s energy business model, CMB is playing an important role and will have the opportunity to expand its activities to continue helping Mexico in many ways. We have been working with Pemex for more than 10 years. We have supported strategic and technical changes of all different types from evaluation to exploration, well design, production optimization and analysis and installation.”

“More than a company, we are a kind of soundboard for organizations that seek a particular vision. We seek to provide a service for decision-making on what areas to focus on, where to direct efforts, and so on, which is going to be needed in the future. We are referring specifically to Pemex.”

CBM, a successful case study at the CMP With respect to Mexico in general, Luis Vielma Lobo, general director of CMB Engineering and Production, Vielma Lobo has had the pleasure of shared his point of view on the country’s current energy situation and being invited to participate several times what the country should expect with the opening of the industry. as a member of the Asociación Mexicana de Empresas de Servicios Petroleros (Mexican Luis Vielma Lobo, general director of CMB Engineering and Production.

Association of Petroleum Service Companies) to participate in discussion sessions where the Energy Commission is helping to strengthen the impending process of the secondary laws.

We have worked with companies in regions where there are oil fields, with the purpose of advising them about the possibilities that are about to open up in Mexico, said Vielma Lobo.

CMB, “because of its characteristics, abilities, and past history, plays an important role in advising companies that actually want to come to contribute to Mexico’s development,” emphasized Vielma Lobo.

June 2014

ozoya said that President Enrique Peña Nieto’s Energy Reform is in response to new circumstances and industry goals at the global level. “Pemex will have to transform itself and be competitive as a productive state-owned firm.”

The CMP 2014 was inaugurated by Pedro Joaquín Coldwell, who envisions a new energy model at the national level that would be integral and cover all rubrics of the industry, benefiting society as a whole.

He indicated that Mexico is at the beginning of the biggest transformation the national industry has had in over 70 years.

Gustavo Hernández mentioned that the Energy Reform represents more than just a sea change in the law, since it implies the major transformation that Mexico so desperately needs. “It is time to look toward the future with a clear objective: the building of a modern country that can leave its blunders in the past.”

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Nalco Champion’s Cristina Luna, project engineer and James E. Buis business manager Mexico.

“We are especially interested in the areas of deep waters in Mexico. There are

great opportunities here and we want to be a part of them and can demonstrate a lot of experience in this area.”

June 2014 Mxe Mexico Energy and Business Magazine

Nalco, one step ahead

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“What experience dictates about these booms, just like the gold rush in California years ago, is that all kinds of companies will initially show interest. However, not all companies that will come will necessarily want to stay,” added Vielma Lobo.

“We will help those (companies) that want to support Mexico.

They differentiate themselves from those that are only coming with the intention of getting rich, and to tell you the truth, that will not work here unless they have the intention of creating and setting up an entrepreneurial spirit in Mexico.”

One of the exhibitors at the CMP was Nalco Champion.

Their business manager James E. Buis commented that “Nalco is a worldwide company that is everywhere where petroleum and gas production are found – in 160 countries, to be exact.”

“We have done business in Mexico for the past 20 years, and in Latin America we have a strong presence in Brazil, Colombia, and Venezuela. Our company is focused on Mexico because of the changes in the laws surrounding the Energy Reform, and we are following closely the secondary laws. Pemex is our client, and we are exploring other opportunities beyond the changes in the law. Nalco is looking toward the future.”

“Nalco Champion is affiliated with Champion Technologies of Mexico, which is unique for Mexico. We provide direct support from the United States where we have our largest technological center in the world in Sugar Land, Texas.”

“We are especially interested in the areas of deep waters in Mexico. There are great opportunities here and we want to be a part of them and can demonstrate a lot of experience in this area.”

One of the most visited booths at the CMP 2014 was Reymar Consultores.

“We have created an office to assist private companies with the pending reforms in Mexico, such as the case of the secondary laws in the Energy Reform.”

All-Inclusive Service, the case of Reymar José Ángel Reyna Gómez of Reymar Constructores talked to Petróleo&Energía at the CMP and explained his company’s recent changes in the area of hydrocarbons.

“We are a company that offers an all-inclusive service of management, legalization, permits, civil engineering, and environmental impact. The company facilitates the securing of licenses required by the federal government, municipalities, and states, and all the paperwork necessary so that activities and projects obtain the proper legal authorizations.

With two years in the national market, Reyna Gómez mentioned that “we have created an office to assist private companies with the pending reforms in Mexico, such as the case of the secondary

laws in the Energy Reform. A company’s production will always be the spearhead of its activities.”

Reyna Gómez said the company has clients in northern Mexico, such as Tecpetrol, where it takes care of their legalization of activities.

The company also does business with transnational companies, such as Pemex.

“Although the parastatal has an external affairs department, we are now involved in the final stages of execution, legalization, and delivery of some of their projects.”