Mexico Oil and Gas Report Q1 2011
Business Monitor International, November 2010, Pages: 90
Business Monitor International's Mexico Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Mexico's oil and gas industry.
The latest Mexico Oil & Gas Report from BMI forecasts that the country will account for 24.46% of Latin America regional oil demand by 2015, while providing 18.92% of supply. Latin American regional use will average an estimated 7.80mn barrels per day (b/d) in 2010. It should rise to 7.96mn b/d in 2011 and reach 8.49mn b/d by 2015. Regional oil production in 2010 should average an estimated 10.02mn b/d. It is set to rise to 11.68mn b/d by 2015. Oil exports have been slipping, because demand growth has exceeded the pace of supply expansion. In 2001, the region was exporting an average of 3.37mn b/d. This total falls to an estimated 2.29mn b/d in 2010 and is forecast to slip further to 2.22mn b/d in 2015. The principal exporters will be Mexico, Venezuela, Colombia and Brazil.
In terms of natural gas, the region in 2010 will consume an estimated 208.5bn cubic metres (bcm), with demand of 263.9bcm targeted for 2015. Production of an estimated 221.0bcm in 2010 should reach 264.3bcm in 2015, and implies 0.4bcm of net imports at the end of the period. Mexico in 2010 will consume an estimated 33.57% of the region’s gas, with its market share for 2015 forecast at 32.21%. In 2010, it will produce an estimated 26.92% of the region’s gas, and is expected to contribute 23.46% by 2015.
For 2011, there is considerable oil demand and oil price uncertainty, but still a very strong possibility that oil will trend higher. Economic growth may have been subdued late in 2010 and into early 2011, but should still support meaningful oil demand increases. Non-OPEC supply is likely to emerge only slightly higher so, with continued OPEC discipline, the foundations have been laid for an oil price rise – albeit falling well short of the improvement seen this year. It seems likely that the 2010 average OPEC basket price will have emerged around the US$77.00 per barrel (bbl) level, representing a year-on-year (y-o-y) gain of approximately 27%. Progress towards at least US$80 is seen as achievable in 2011. Mexican real GDP in 2010 is assumed by BMI to rise by 4.4%, with forecast average annual growth of 2.9% in 2010-2015. Unless the government introduces a radical shift in energy policy, we expect state owned Petróleos Mexicanos (Pemex) to retain full responsibility for oil production, without international oil company (IOC) involvement. We are assuming oil and gas liquids production of no more than 2.21mn b/d by 2015, with the country expected to pump 2.95mn b/d in 2010. Beyond the weakness of 2009, consumption is forecast to increase by no more than 1.5% per annum to 2015, implying demand of 2.08mn b/d by the end of the forecast period. The net export capability would therefore be approximately 134,000b/d by 2015. Gas production is forecast to increase from an estimated 59.5bcm in 2010 to 62.0bcm over the period, with 23.0bcm of net imports required by 2015.
Between 2010 and 2020, we are forecasting a decline in Mexican oil production of 35.5%, with crude volumes falling steadily to 1.90mn b/d in 2020. Oil consumption between 2010 and 2020 is set to increase by 11.3%, with growth slowing to an assumed 1% per annum towards the end of the period and the country using 2.18mn b/d by 2020. Gas production is expected to rise gradually, from an estimated 59.5bcm in 2010 to 72.0bcm in 2020. With demand growth of 90.5%, this implies a need for imports to rise from an estimated 10.5bcm to 43.0bcm between 2010 and 2020. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
Mexico holds eighth place, behind Ecuador, in BMI’s composite Business Environment (BE) rating, which combines upstream and downstream scores. The country takes ninth place, ahead only of Chile, in BMI’s updated upstream Business Environment ratings, in spite of its vast hydrocarbons resource base. It lags well behind Bolivia and Ecuador, so is unlikely to move further up the league table over the short term. Although the absolute resource base may be large, the output growth outlook is poor, reserves-toproduction ratios (RPR) are low, state ownership of oil assets is absolute and country risk is relatively high. Mexico now ranks equal fifth with Trinidad in BMI’s downstream Business Environment Ratings, reflecting its high levels of oil and gas consumption, refining capacity and moderate country risk, plus low levels of forecast oil and gas demand growth. Ecuador is six points behind and unlikely to mount a near-term challenge.
Executive Summary
SWOT Analysis
- Mexico Political SWOT
- Mexico Economic SWOT
- Mexico Business Environment SWOT
Mexico Energy Market Overview
- Global Oil Market Review
- Regaining Momentum
- Quarterly Trends
Global Oil Market Outlook
- Sitting Comfortably
- Oil Price Forecasts
Oil Supply, Demand And Price Outlook
- Short-Term Demand Outlook
- Table: Global Oil Consumption (000b/d)
- Short-Term Supply Outlook
- Table: Global Oil Production (000b/d)
- Longer-Term Supply And Demand
- Oil Price Assumptions
- Table: Crude Price Assumptions 2010
- Table: Oil Price Forecasts
- Regional Energy Market Overview
- Oil Supply And Demand
- Table: Latin America Oil Consumption (000b/d)
- Table: Latin America Oil Production (000b/d)
- Oil: Downstream
- Table: Latin America Oil Refining Capacity (000b/d)
Gas Supply And Demand
- Table: Latin America Gas Consumption (bcm)
- Table: Latin America Gas Production (bcm)
- Liquefied Natural Gas
- Table: Latin America LNG Exports/(Imports) (bcm)
- Business Environment Ratings
- Latin America Region
Composite Scores
- Table: Regional Composite Business Environment Rating
- Upstream Scores
- Table: Regional Upstream Business Environment Rating
- Mexico Upstream Rating – Overview
- Mexico Upstream Rating – Rewards
- Mexico Upstream Rating – Risks
- Downstream Scores
- Table: Regional Downstream Business Environment Rating
- Mexico Downstream Rating – Overview
- Mexico Downstream Rating – Rewards
- Mexico Downstream Rating – Risks
Business Environment
- Legal Framework
- Infrastructure
- Labour Force
- Foreign Investment Policy
- Tax Regime
- Security Risk
Industry Forecast Scenario
- Oil And Gas Reserves
- Oil Supply And Demand
- Gas Supply And Demand
- LNG
- Refining And Oil Products Trade
- Revenues/Import Costs
- Table: Mexico Oil And Gas – Historical Data And Forecasts
- Other Energy
- Table: Mexico Other Energy – Historical Data And Forecasts
- Key Risks To BMI’s Forecast Scenario
- Long-Term Oil And Gas Outlook
Oil And Gas Infrastructure
- Oil Refineries
- Table: Refineries In Mexico
- Service Stations
- Oil Storage Facilities
- Oil Terminals/Ports
- Oil Pipelines
- LNG Terminals
- Table: LNG Import Terminals In Mexico
- Gas Pipelines
- Macroeconomic Outlook
- Table: Mexico – Economic Activity
Competitive Landscape
- Executive Summary
- Table: Key Energy Player
- Overview/State Role
- Licensing And Regulation
- Government Policy
- International Energy Relations
- Table: Upstream Player
- Table: Downstream Player
Company Monitor
- Petróleos Mexicanos (Pemex)
- Repsol YPF Mexico
- Shell – Summary
- Chevron – Summary
- Petróleo Brasileiro – Summary
- Total – Summary
- Sinopec – Summary
- Others – Summary
- Service Companies
Oil And Gas Outlook: Long-Term Forecasts
- Regional Oil Demand
- Table: Latin America Oil Consumption (000b/d)
- Regional Oil Supply
- Table: Latin America Oil Production (000b/d)
- Regional Refining Capacity
- Table: Latin America Oil Refining Capacity (000b/d)
- Regional Gas Demand
- Table: Latin America Gas Consumption (bcm)
- Regional Gas Supply
- Table: Latin America Gas Production (bcm)
- Mexico Country Overview
- Methodology And Risks To Forecasts
Glossary Of Terms
- Oil And Gas Ratings: Revised Methodology
- Introduction
- Ratings Overview
- Table: BMI Oil And Gas Business Environment Ratings: Structure
- Indicators
- Table: BMI Oil And Gas Business Environment Upstream Ratings: Methodology
- Table: BMI Oil And Gas Business Environment Downstream Ratings: Methodology
BMI Methodology
- How We Generate Our Industry Forecasts
- Energy Industry
- Cross Checks
- Sources
- Petróleos Mexicanos (Pemex)
- Pepsol YPF Mexico,
- Shell
- Chevron
- Petróleo Brasileiro
- Total, Sinopec
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