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Natural
Gas High Priority for Incoming Mexican President, Houston
Workshop to Discuss Issues, Alternatives
HOUSTON, TX -- August 10, 2006 -- Mexico appears ready
to increase PEMEX's budget for oil and gas exploration
and production. For many decades, the state-owned monopoly
has been starved of capital as the federal government
of Mexico has siphoned funds away from oilfield development
and into social programs. As a result, Mexico's oil
production has been declining, according to oil and
gas major, BP.
Production of natural gas has also been virtually flat.
The nation has had to import about one billion cubic
feet daily from the United States for the past several
years. In 2005 when average U.S. export prices climbed
to $7.75 per million Btu, this cost Mexican consumers
dearly. They are estimated to have spent more than $2.5
billion on U.S. natural gas imports.
For this reason, Mexico has instituted an aggressive
LNG import policy. The country is building two LNG receiving
terminals and signing long-term contracts for supply.
The National Electricity Utility (CFE) has recently
signed important contracts to import LNG and is planning
more ambitious projects in the not-to-distant future.
Mexico, however, is believed to have huge untapped
reserves of natural gas in the northern parts of the
country. The Burgos basin has been identified as a source
for significant reserves. The Lankahuasa and Kosni fields,
offshore Veracruz, are also believed to have trillions
of cubic feet of non-associated natural gas. In total,
the nation is believed to have more than 50 trillion
cubic feet of reserves, enough to supply 36 years of
consumption at current levels.
So, how might a new Mexican president change PEMEX's
policy towards oil and gas development? Will a Calderon
administration be more aggressive than an Obrador administration?
How might this affect demand for U.S. imports and LNG?
Sept. 27, Zeus Development Corporation is hosting a
workshop to discuss these issues in light of the lingering
questions over the July presidential elections. Among
the speakers are Francisco Salazar, chairman of the
Mexican Energy Regulatory Commission; Javier Humberto
Estrada, director general, Analítica Energética
SC; Carlos Ayón, Gnostica, S.C.; and Luis Pinto,
director, Council of the Americas.
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