2013-02-02 16:05:23 - New Energy research report from Business Monitor International is now available from Fast Market Research

BMI View: While recent deepwater discoveries in the Gulf of Mexico have generated renewed optimism for Mexico's long-term production outlook, both the limited scope of the discoveries and the timeframe over which they expect to be developed reinforce our forecasted decline in oil production through 2021. Therefore energy sector liberalisation in President Pena Nieto's administration is becoming increasingly important, although Mexican politics make reform far from a certainty

* BMI forecasts that that Mexican oil production will decline at an average rate of 2.3% between 2013 and 2017, with an accelerated decline of 3.3% in the second half of our forecast period. Oil consumption over the same period is expected to rise at a moderate rate, reaching 2.27mn b/d by

2017, implying net exports of 353,000b/d.
* Gas output is forecast to increase modestly over the coming years, with cheap US gas deterring significant investments into domestic gas production. Gas production is projected to expand from 46.80bn cubic metres (bcm) in 2011 to 49.83bcm in 2017. This will do little to reduce import needs, however, as consumption is forecasted to rise rapidly from 61.29bcm in 2011 to 80.02bcm in 2017, implying an import requirement of approximately 30.00bcm by 2017, more than double the 2011 import requirement.
* Our bearish view of Mexican oil production is reinforced by several interconnected fundamentals, including Pemex's relative inexperience in deepwater drilling, as well as ongoing financial troubles in the form of rising capital expenditures amid a 2013 budget that remains stagnant at US$25.6bn. The inability for the company to work with foreign partners also prevents it from spreading capital risk, while also not being able to capitalize on foreign expertise and technology. Indeed, the US-Mexico maritime border has seen an average of 100 wells a year drilled by more than 24 oil companies. For its part, Pemex has only been able to drill an average of two wells a year since 2006.
* The stakes for energy sector liberalisation have therefore never been higher. In our view, due to the time that it will take for production to come online (for example, the NHC believes it will take approximately 10 years for the September 2012 Trion-1 oil discovery to begin commercial production), any delay in oil reform will only further push the potential for a significant increase in production past our current forecast period. As such, it is imperative that Pena Nieto tackles energy sector liberalisation soon into his presidency.
* Despite being one of the region's largest oil producers, Mexico ranks last, behind Bolivia and Argentina, in BMI's risk/reward ratings (RRRs), which combine upstream and downstream scores. Although the absolute resource base may be large, the output growth outlook is poor, reserves-to-production ratios (RPR) are low, state ownership of oil assets is absolute and country risk is relatively high. Mexico ranks joint fourth together with Peru in BMI's downstream ratings, reflecting its high levels of oil and gas consumption, refining capacity and moderate country risk, plus low levels of projected oil and gas demand growth. Nonetheless, Mexico is one market that could move up the rankings.


Full Report Details at
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Mexico's dependence on oil prices leads to high volatility in the country's export revenues. We are forecasting for crude prices to fall in the coming years, with our OPEC basket forecast falling to US$99.1 in 2013 and US$96.2 in 2014. Similarly, we are forecasting WTI to average US$92.00 in 2013, and declining to US$91.0 in 2014.

Partial Table of Contents:

SWOT Analysis
- Mexico Oil and Gas SWOT
Industry Forecast Scenario
- Oil And Gas Reserves
- Table: Mexico Proven Oil and Gas Reserves and Total Petroleum Data, 2010-2016
- Table: Mexico Proven Oil and Gas Reserves and Total Petroleum Data, 2015-2021
- Oil Supply And Demand
- Table: Mexico Oil Production, Consumption and Net Exports, 2010-2016
- Table: Mexico Oil Production, Consumption and Net Exports, 2015-2021
- Gas Supply And Demand
- Table: Mexico Gas Production, Consumption and Net Exports, 2010-2016
- Table: Mexico Gas Production, Consumption and Net Exports, 2015-2021
- LNG
- Refining And Oil Products Trade
- Table: Mexico Refining - Production and Consumption, 2010-2016
- Table: Mexico Refining - Production And Consumption, 2015-2021
- Revenues/Import Costs
Country Oil & Gas Risk/Reward Ratings
- Mexico Upstream Rating - Overview
- Mexico Upstream Rating - Risks and Rewards
- Mexico Downstream Rating
- Mexico Downstream Rating - Risks and Rewards
Regional Risk/Reward Ratings
- Table: Latin American Oil & Gas Risk/Reward Ratings
- Table: Upstream Risk/Reward Ratings
- Table: Downstream Risk/Reward Ratings
Mexico Energy Market Overview
- Table: Mexico - Upstream Projects Database
Oil And Gas Infrastructure
- Oil Refineries
- Table: Downstream Projects
- Service Stations
- Oil Storage Facilities
- Oil Terminals/Ports
- Oil Pipelines
- LNG Terminals
- Table: LNG Import Terminals In Mexico
- Gas Pipelines
Competitive Landscape
- Executive Summary
- Table: Key Energy Players
- Overview/State Role
- Licensing and Regulation
- Government Policy
- International Energy Relations
- Table: Upstream Players
- Table: Downstream Players
Company Profiles
- Petroleos Mexicanos (Pemex)
- Repsol Mexico
- Shell - Summary
- Chevron - Summary
- Petroleo Brasileiro - Summary
- Total - Summary
- Sinopec - Summary
- Others - Summary
- Service Companies
Regional Energy Market Outlook
Global Energy Market Outlook
- Table: Global Oil Demand Forecasts - A Comparison
Latin America - Regional Appendix
- Table: Oil Consumption - Historical Data & Forecasts, 2009-2016 ('000b/d)
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Full Table of Contents is available at:
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