The Mexican market is now an O&G consulting paradise. Former PEMEX staff portrait themselves as seasoned Oilmen, Oil Field Service call themselves E&P experts and everyone else falls into one of three buckets according to their “experience” size of their wallet and/or delusions of grandeur.
There are the consultants or people who work(ed) with organizations with contracts in the national energy sector, there are the expert’s or people who claim to have worked with providers of PEMEX/CFE in the past and finally the Gurus, people who have worked for a subsidiary of PEMEX/CFE or contracted sometime in the past for them.
A few good men (E&P experts)
While there are many O&G people working in Mexico the true E&P experts are extremely rare,
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What we are left with is pure profit at a Contango scenario as the futures are priced higher than spot prices for crude across the board.
Mexico E&P only for Billionaires?
Most Mexican investors base their assumptions of a capital requirement to participate on the sector on the USD$1B mark thanks to the Round 1.1. When in fact investors can partner with FEP to acquire low risk (brownfield) E&P projects valued in excess of NPV USD$300mm for as low as USD$ 1mm.
FEP has access to acquisition opportunities with CAPEX below USD$60mm, these assets are capable of providing significant returns even at USD$35/barrel with average lifting cost of USD$10/barrel, and downside NPV valuation above USD$300mm. So are there similar opportunities in Mexico? You betcha!
De-risking methodology #1 selectivity
By focusing on asset selectivity of projects rather than building empires we can achieve better risk adjusted returns and sustainability. FEP risk management framework flips the process upside implementing time proven methodologies across the board from operational and financial process. PWC article on CAPEX Selectivity.
The right ingredients are not enough…
While it is true that Mexico has the right ingredients to become an energy super power, including armies of cheap labor, prolific basins capable of producing at the lowest cost, and vast amounts of capital to fund
Pecom, compañía petrolera de Argentina, desde sus inicios fue ganando terreno en la industria del petróleo avanzando a buen ritmo a través del paso de los años. Desde la obtención de su primera concesión, hasta el inicio de operaciones en diversos países sudamericanos, Pecom se fue consolidando como una empresa fuertemente integrada verticalmente.
“When AES undertook primarily domestic contract generation projects where the risk of changes to input and output prices was minimal, a project finance framework was employed.”
Economic opportunity is probably out of reach in Mexico, but that’s is why Mexican migrants relocate to the U.S. Security plays a big role in the decisions Mexican migrants relocating to the U.S to find better security and better living conditions. The Mexican people migrate to the U.S in masses, because poverty in Mexico hurts everyone they see no progress in staying at home. Mexico has its issue and hard time keeping its people but change is coming slowly but surely. We know now what needs to be done to help Mexico thrive into the next
ExxonMobil is identified as one of the world’s leading oil and gas businesses. It manages market commodities and means countrywide. ExxonMobil is entail in “marketing, gas, and oil exploration, transportation and production in roughly 200 nations” (ExxonMobil, 2015). This company furnishes assistance and products under label names such as “Mobil, Esso, and Exxon. ExxonMobil is known as one of the biggest oil industrial installation where a substance is refined in the nation” (ExxonMobil, 2015). This essay discusses ExxonMobil’s strategic initiative from
To be given an opportunity to do business in Mexico, one must understand where to start and how to deal with a totally different social and cultural environment from what one is accustom too. To succeed in making a good first impression and to carry out any type of business transaction, it is important to understand what these differences are.
In manufacturing sector government promotes operations for labour intensive industries and exports for example tourism and in bound manufacturing units taking advantage of readily available low cost labour and vicinity to US market. Due to its population growth Mexico is the home for cheap and highly skilled young labour force. As per Huff Post Tech (P.1 “For a country that graduates more than 118,000 engineers each year and with more than 80 institutions specializing in engineering, entrepreneurship represents hope and the prospects of upward mobility for many
That’s good news for New Mexico, and for all U.S. border states, because the rapid growth of Mexico’s maquilas, or assembly factories, is creating huge business opportunities up and down the 2,000-mile U.S.-Mexico border. And that, in turn, is creating new industrial hot spots in places such as southern New Mexico, where companies are flocking to set up new facilities to supply goods and services to the maquila industry. Other pressures include the strengthening of Chinese and some other Asian currencies against the U.S dollar, which makes exports from those countries more expensive, and the length of time it takes to transport goods from those places
What is interesting here is that it appears as if Mexico had conceded that Donald Trump was going to be the 45th President of the United States months prior to the election. The Mexican economy gave off the perception that its sitting President was no match for a New York business man running for President here
João Nogueira Batista, Chief Financial Officer of the Brazilian firm Petrobras, reflected on Gros’s words as he prepared for a Board of Directors meeting in July 2002. The main item on the Board’s agenda was the proposed acquisition of an Argentinean firm, the Perez Companc Group, or Pecom.2 The acquisition would significantly increase Petrobras’s oil and gas production and add to its oil reserves. It would also provide the mainly Brazilian-based
One of the most reputable resources that Exxon Mobil has today is a strong brand name. Exxon Mobil operates all over the world and is recognized in every part of the world (Datamonitor, 2008). When people all over the world know who a company is, what they do, and where they are located, the company gains a unique competitive advantage over
Mexico’s pursuit of free trade agreements with other countries is a way to bring benefits to the
These large investors have the ability to bring a lot of capital into these markets and therefore it would be wise for them to invest there in order to attempt to reap the benefits of the possible returns. I believe individual investors should be attracted to frontier markets if they have plenty of capital and they are confident in taking the risk. However, most individual investors won’t have the funds such as the large investors that can bring a lot of capital into these markets where companies are limited in capitalization. If the funds aren’t there, then it would take a lot of risk because frontier markets are as risky as they could be profitable. One suggestion would be to invest a small amount and hope to make a large return off it but not expect it. An individual investor should not tie up a lot of his money into a large risk. Lastly, companies trying to obtain partial or full acquisitions should be careful. Obtaining partial ownership is a great idea because it allows you to bring skilled workers in from better developed countries such as the US. The risk however is that some of these countries don’t take foreign ownership too well. The risk with that would be heightened if there was a full acquisition. However, I feel that partial acquisition is a great idea due to the fact that one side can bring new talent into the company while the owners who live in the country where they have started it can help bring understanding of
Project finance is best understood in terms of a risk allocation which reconciles the potentially conflicting objectives of borrowers and lenders by utilizing the long-term economic and commercial linkages between the sponsors, lenders and third party participants involved with a project. (Howcroft &Fadhley, 1998).
The extensive roles of energy in economic growth are well known. Kaiser, Mark .J (2007) posits that there is a solid relationship between national economy and energy development, as energy supply, demand and pricing have enormous influence on economic growth. With the fast pace of economic development over the past decades, many developing nations experienced a sharp annual growth in petroleum demand. However, those with large or potentially large petroleum deposits, very sufficient and financial resources for supply investments, especially for the development of oil and gas production and exploration.
Mutually exclusive projects are another situation for which NPV must extend its approach. In such projects, the chosen project is usually one which results in the greatest positive NPV because this will produce the greatest addition to shareholders’ wealth. In the case of mutually exclusive investments, ranking becomes crucial as only