Why Mexico?

Mexico Energy Reform Drivers
Insufficient O&G Production & Infrastructure

• Current O&G production has declined 30% from 2004 peak to 2.4 MMBOEPD

Imports have been unable to increase to a sufficient level to meet demand due to infrastructure constraints

All new E&P areas require gathering and transportation pipelines to connect them to storage and exporting centers

*(Graphs sourced from Mexican Energy Reform | Adrian Lajous | Center on Global Energy Policy | June 2014)*

Mexican Energy Reform Key Objectives

  • Modernize refining, transportation and storage infrastructure
  • Create jobs and generate economic growth
  • Increase transparency and reduce corruption in the energy sector
  • Generate more hydrocarbons at lower cost and risk
  • Grow gas-fired electricity generation

Opportunities for Projects

  • In energy storage and distribution infrastructure
  • Mexico, the 6th largest consumer of gasoline and diesel fuel, imports 572,000 Bbl. per day (more than US$ 26 bn in 2014)
  • Mexico City (20.8MM pop.) has only 3 days of fuel storage capacity
  • Current storage capacity for LNG is 2.4 days
  • 7 days average wait for vessels to load/unload in existing ports

Private Development

  • Capitalizing on the private development of the Mexican energy industry driven by the federal government’s reform initiative.
  • Investment of US$81B required by 2018 to complete required infrastructure for the energy industry.

Stable and Predictable Business Environment

  • Industry operates with USD denominated take-or-pay contracts
  • With creditworthy off-takes •
  • Providing stable, predictable long-term cash flows •

Reform Objectives & Principles

Key Objectives

Generate more hydrocarbons at lower cost and risk

Modernize refining, transportation and storage infrastructure

Grow gas-fired electricity generation

Create jobs and generate economic growth

Increase transparency and reduce corruption in the energy sector

Guiding Principles

Mexican State retains ownership and control of hydrocarbons

  • E&P is only remaining strategic regulated sector
  • Midstream and downstream have been deregulated

Private sector participation through contracts and a new fiscal regime

Restructured energy sector with strengthened regulatory agencies

Mexico Energy Reform Drivers

Insufficient Refined Fuel Infrastructure

Mexico , the 6th largest consumer of gasoline and diesel fuel, imports 572,000 Bbl. per day

Mexico City (20.8MM pop.) has only 3 days of fuel storage capacity

Current storage capacity for LNG is 2.4 days

7 days average wait for vessels to load/unload in existing ports

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