Page 11 - LatAmOil Week 21 2020

LatAmOil M E X I C O LatAmOil
Mexican independent says gas sector is still attractive despite turmoil
THE head of an independent company believes that Mexico’s natural gas sector still offers new opportunities for investment, despite the ongo- ing turmoil in global energy markets triggered by the coronavirus (COVID-19) pandemic.
“It would be extremely difficult to invest in the oil sector right now, [owing] to Pemex’s financing overhang,” said Warren Levy, chief executive of Mexican independent Jaguar E&P, at the La Jolla energy conference. “But we see real potential for the natural gas industry to be one of the few bright spots over the next 12-18 months.”
Levy was quoted as saying by Argus Media that there were large areas of “under-drilled” natural gas reserves in the country’s north- ern regions and also along the Gulf coast. He described these areas as attractive prospects and said that investing in gas production would allow Mexico, which currently relies on gas imports from the US, to improve its energy security and boost its economy.
He singled out the Burgos Basin in northern Mexico as a particularly interesting investment opportunity, noting that it had the advantage of proximity to the Permian Basin in Texas and New Mexico. Investors in the area could easily gain access to service companies working at Per- mian fields, he said.
“From a technical perspective, it is much easier to work here than anywhere else in Latin America,” he commented. “You simply do not have to put any equipment on a boat.”
Levy admitted that there were challenges, such as high levels of organised crime in Mexi- co’s north-eastern regions. He asserted, though,
that the energy companies operating in the region “understand the rules of engagement.”
“You leave people to operate during certain hours of the day, and then they leave you to operate too,” he said.
Jaguar was founded to take advantage of the energy reforms launched by former President Enrique Pena Nieto in 2014. It has won five con- tracts in upstream bidding rounds.
Pena Nieto’s successor, Andres Manuel Lopez Obrador, has been less eager to pursue reform. When he took office in 2018, he vowed to reduce foreign and private investment in the Mexican oil sector and said he would put more power in the hands of state-owned oil and gas company Pemex. ™
Jaguar E&P operates the Manuel Rodriguez Aguilar field (Image: Jaguar E&P)
COLOMBIA
Colombian government eyes pipeline tariff intervention
THE Colombian government is reportedly considering making cuts to oil pipeline tariffs, which private producers have criticised as being too high.
Armando Zamora, president of the coun- try’s National Hydrocarbons Agency (ANH), said during a virtual event for the Institute of
the Americas’ La Jolla energy conference that Colombia was considering this move. “The gov- ernment, yes, it’s considering an intervention in tariffs,” he was quoted as saying by Reuters.
Zamora went on to say that taking this step might prove to be “very tricky,” as there was no precedent for such action.
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