Energy
From The Report: Mexico 2017
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Mexico’s energy sector has been undergoing a profound paradigm shift since a reform programme, launched in 2013, put an end to state monopolies in most subsectors and began the process of opening the production and distribution of oil, gas, petrochemicals and electricity to private investment. In parallel, the entire legal, regulatory and institutional framework is being transformed to oversee new market mechanisms. The fruits of these efforts became more apparent in 2016 when a number of notable developments took place, including two successful long-term electricity supply auctions and a deepwater oil and gas auction for exploration and production in December 2016. A significant challenge going forward will be to ensure that infrastructure is of sufficient quantity and quality for the entire country to benefit from the reform efforts. While the increase in global oil prices and the decline in value of the Mexican peso in the second half of 2016 and into early 2017 will cause further knock-on increases in prices facing consumers of both combustibles and electricity, the same phenomena should give a boost to the energy sector more generally. This chapter includes interviews with José Antonio González Anaya, CEO, Petróleos Mexicanos; Jaime Hernández Martínez, Director-General, Federal Electricity Commission; and Angélica Ruíz Celis, Director-General, Vestas Latin America.

Articles from this Chapter

Overview

Game changer: Sweeping reforms open the sector to private investment and emphasise clean, sustainable energy
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Historically, Mexico is an energy powerhouse, one of the world’s most important crude oil producers, and highly dependent on those exports for economic growth, foreign currency and government revenues. At 5.2% of GDP in 2015, however, oil and gas extraction account for a smaller share of the national economy than at any time in recent history, down from about twice that level in the mid-nineties. A number of factors are at play here, including a decade of declines in oil production, low oil prices…

Analysis

Going once, going twice: Strong competition among clean energy firms keeps prices low at the country’s first long-term electricity auctions
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As part of ongoing energy reforms, Mexico’s authorities aim to reduce costs, protect the environment and develop power sector infrastructure by stimulating competition in electricity generation and transmission, while the National Centre of Energy Control (Centro Nacional de Control de Energía, CENACE) maintains control of transmission by managing the power grid. The state-owned Federal Electricity Commission (Comisión Federal de Electricidad, CFE) has long been the dominant player in Mexico’s…

Interview

Brave new world: José Antonio González Anaya, CEO, Pemex, on the changing dynamics of the energy sector
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Interview:José Antonio González Anaya In the context of energy reform, what steps are being taken to ensure that the Mexican oil industry remains competitive? JOSE ANTONIO GONZÁLEZ ANAYA: The president has given two indications about the energy reform: that Pemex’s operational dynamics will change to meet the changing price environment, and that the reform’s implementation will be accelerated. Naturally, these two have to go handin-hand because there can’t be a healthy energy sector…

Analysis

Hydrocarbons offering: The first licensing round of a major oil and gas auction attracts significant interest from international players
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Announced in 2013, Mexico’s energy reforms were the centrepiece of President Enrique Peña Nieto’s strategy to revitalise the national economy and reverse the decline in hydrocarbons production that has been in evidence over the past decade. Central to these efforts was ending the monopoly of Petróleos Mexicanos (Pemex) on the exploration, production, refining, distribution and sale of oil and gas. Having laid the groundwork through constitutional change, legislative action and institutional…

Interview

Generating change: Jaime Hernández Martínez, Director-General, Federal Electricity Commission, on electricity reliance and enacting reforms
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Interview:Jaime Hernández Martínez To what extent can the restructuring of the public utility increase the flexibility, transparency and competitiveness of the energy sector? JAIME HERNÁNDEZ MARTINEZ: Like many other public sector companies in the energy sector, the Federal Electricity Commission (Comisión Federal de Electricidad, CFE) is going through a significant transformation due to the reform started in 2013. In 2016 we faced the challenge of separating into transmission, distribution,…

Interview

A fresh perspective: Angélica Ruíz Celis, Director-General, Vestas Latin America, on the future of renewable energy
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Interview:Angélica Ruíz Celis What is the relationship between state-owned organisations and private companies in the wake of reforms across the sector? ANGELICA RUÍZ CELIS: Since the promulgation of the energy reform in 2013, the Mexican government has opened up the market to new key players and investors. Several companies have already signed memoranda of understanding with the Federal Electricity Commission in order to co-develop wind projects and establish a positive and profitable…

Analysis

Nuts and bolts: Authorities take steps to strengthen energy infrastructure
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Recent reforms have opened up Mexico’s energy markets with the promise of greater levels of investment, more competition and stronger economic growth. For these benefits to realise their maximum potential and reach all regions of the country, it is essential that infrastructure of sufficient quantity and quality is put in place. To a large extent, Mexico has fallen behind in terms of developing its energy infrastructure. This is due to significant and prolonged underinvestment by the state monopoly…

Analysis

A greener future: Investments in renewables to lead to a vast increase in solar and wind capacity
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While the shift in the political relations with the US has raised new concerns on a number of economical fronts, Mexico’s plans to make the most of its renewable energy resources will benefit both the country itself and its northern neighbour. A significant increase in the contribution of solar and wind into the energy mix is expected in the 2017-18 period. Towards A Greener Mix Pedro Joaquín Coldwell, minister of energy, told local media in March 2017 that $100bn worth of investments are expected…