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LatAmOil MEXICO LatAmOil

Mexico reportedly seeking

quotes for 2021 oil hedge

THE Mexican government has asked banks to hedge would yield roughly 150bn pesos ($6bn).
submit quotes for its annual oil hedging pro- This money will help bolster state revenues,
gramme, but the country is expected to pay which have been battered this year because
more for less coverage in 2021 because of higher crude prices fell when the coronavirus (COVID-
market volatility this year. 19) pandemic reduced energy demand. It will
The Finance Ministry has asked top Wall also mitigate the impact of the market turmoil
Street banks to submit quotes, sources famil- on prices for Mexico’s main export crude, Maya.
iar with the matter told Reuters last week. This The grade dropped to historic lows in April
action represents the beginning of the process to as a result of the pandemic and the price war
execute the hedge, the sources noted. between Saudi Arabia and Russia, two of the
Each year, Mexico buys up to $1bn worth world’s largest crude producers.
of financial contracts with the intent of shield- Mexico’s oil export basket was also hit. It
ing itself from fluctuations in world crude oil dropped from an average of $51.7 per barrel
markets. It normally arranges the programme in January to $48.5 and $24.1 in February and
by purchasing options from North American March respectively.
banks and reserving part of a special fund. The Finance Ministry has said it expects
This year, bankers and officials on both prices to average around $24 per barrel for the
sides of the deal are predicting that Mexico will remainder of the year.
arrange a smaller hedge, since the options used This year’s successful hedge is not antici-
to protect oil profits are more expensive. pated to benefit Pemex, according to the Centre
Mexico’s 2020 hedge, which arranged last of Budgetary and Economic Investigation, an
year, locked oil prices in at $49 per barrel. This independent Mexico City-based think-tank.
move shielded the country from the impact of The state-owned company posted multi-bil-
the oil price crash. Mexican President Andres lion-dollar losses in the first and second quarters
Manuel Lopez Obrador said in April that the of the year. ™

COLOMBIA
Colombia’s Promigas acquires

Peruvian distributor Gascop

COLOMBIAN natural gas transporter Promi-
gas has expanded its portfolio in neighbouring
Peru by acquiring Gas Comprimido del Perú
(Gascop).
Last week, the Colombian firm signed a
contract with its Peruvian subsidiary, Gases del
Pacifico, to acquire 100% of Gascop. The Peru-
vian company supplies gas in the northern part
of the country, while Gases del Pacifico also
distributes gas in the northern regions of Lam-
bayeque, Cajamarca, La Libertad and Áncash.
The value of the deal has not been disclosed. Many remote areas of Peru lack gas access (Photo: Andina)
Promigas already has a stake in the Peruvian
firm Calidda, which distributes gas in Lima and The Peruvian government has in recent years
Callao. Another one of its subsidiaries – Gases rolled out a programme known as “massifica-
del Norte, the sister company of Gases del Pacif- tion,” which is designed to expand gas access
ico – struck a deal late last year to distribute gas across the country by taking gas to people who
in the Piura region in north-western Peru. live in remote areas.

Week 30 30•July•2020 www. NEWSBASE .com P11