Transforming Mexico’s Oil and Gas Sector - pesa.orgDeep Water Onshore Conventionals Total...
Transcript of Transforming Mexico’s Oil and Gas Sector - pesa.orgDeep Water Onshore Conventionals Total...
Aldo Flores-QuirogaDeputy Secretary of Energy for HydrocarbonsMexico
Houston, TX| October | 2017
Transforming Mexico’s Oil and Gas Sector
PESAPetroleum Equipment & Services Association
Contents
1. Progress to date
2. Next steps
2
3
1. Progress to date
4
State monopoly Open markets
In only three years, Mexico’s energy reform has deeply transformed the country’s oil and gas industry
* Not including 20 seismic research firms** Including firms investing in ducts, storage terminals and railroad infrastructure
Source: CRE, CNH y SENER.
exploration and production companies*
transportation and storage infrastructure companies**
675627 new oil products retailers
$3,187
$14,149
$34,353
$9,164
$6
0,8
53
0
7,500
15,000
22,500
30,000
37,500
45,000
52,500
60,000
OnshoreConventionals
Shallowwaters
Deepwaters
PEMEXFarm-Outs
TotalInvestment
Mill
ion
USD
5
Mexico is a globally competitive destination for E&P investment
new contracts
awarding success73%
biddingRounds8 new
companies67
prospective resources*
3372
newinvestment
3.6billion boe
~$61billion
* Risk-adjusted
Source: CNH
US companies are part of the revitalization of Mexico’s oil and gas industry
Source: CNH
6
share of expected investment
11%US investment in Mexico’s oil and gas upstream sector
$6.5 billion
$1,218
$562
$12
$4,713
$48
$6
,55
30
1,000
2,000
3,000
4,000
5,000
6,000
7,000
ShallowWater
ShallowWater
OnshoreConventionals
DeepWater
OnshoreConventionals
TotalInvestment
Mill
ion
USD
(M
MU
SD)
$22,758
$10,642
$9,633
$7,644
$6,553$1,514 $520
$5
9,2
63
0
10,000
20,000
30,000
40,000
50,000
60,000
Europe &Eurasia
AsiaPacífic
Mexico China USA South &CentralAmerica
Canada TotalInvestment
Mill
ion
USD
(M
MU
SD)
38%
18%
16%
13%
11%3%
1%
7
Two private companies have announced discoveries amounting to 3.4 billion barrels of crude oil equivalent
* 3P reserves as of January 1, 2017
Sources: CNH, ENI and Talos Energy, Premier Oil and Sierra Oil
R1.1 Área 7
Tabasco
R1.2 Area 1
Amoca-3
Amoca-2
●
R1.1 Área 7
Tabasco
R1.1 Área 7
Zama-1
●
+ 1.4 Billion boe + 2 Billion boe
Mexico’s 3P Reserves*
13%Mizton-2
●
8
The Mexican side of the Gulf of Mexico is currently the area with the largest seismic research in the world
* On average, ~ 35 firms per bidding cycle accessed the data room to assess their investment plans
Source: CNH
3D seismic improves long term business decisions *
Billion in new investment$2Companies operating20Permits issued54
~4 times 3D seismic studies prior to the energy reform
9
The natural gas market is growing more competitive
* 2006 – 2016 Note: Market value computed with 2016 data. Source: CENAGAS
INDEPENDENT SYSTEM OPERATOR
Cross-border pipelinesopen to private companies
companies reserved capacity3
market value per year
companies reserved capacity24
market value per year
Open access to the national pipeline system
Open markets
registered companies62
Market prices started in July 2017
$245million
$2.3billion
billion cubic feetper day
7.8 largest marketin the world
9th annual growthrate*3%
10
The market for US natural gas expands as Mexico’s pipeline network grows
7,092 mi1,491 mi3,161 mi
growth in 6 years66%
miles by 201811,744
Added 2013–2016
Pre-energy reform
Under construction
new investment$12 billion
11
Mexico’s LPG market became fully open in 2017
* Average of 2017** Period: 2010-2016
Source: CRE
Import permits122
74%
share of private importsin LPG market~37%
LPG imports by privatesector*
more distributionpermits since 2016
distribution companiesin 2017198
26times
storage companies20
logistics companies202
3rd largest LPG marketin the world
Free imports(2016)
Private Sector already ownsinfrastructure
Market prices(2017)
Mbd, 2016293
12
The Mexican motor fuels market is open for business
Free imports
private companies importing gasoline and diesel **39
Harmonization to North America’s fuel quality
Gradual market opening
import permits issued *
* (224) gasoline and (324) diesel ** (16) gasoline and (23) diesel Source: CRE
ethanol asfuel blender (maximum)
10%
Non-tariff barrier to entry removed
out of 32 states selling at market prices6
open season forinfrastructure completed1
548
6th largest motor fuels market in the world1,210 Mbd, 2016
Equivalent to the combined markets of Colombia and Ecuador
13
Global and local retailers are quickly expanding operations in the 6th
largest motor fuels market in the world
Monterrey
Mérida
CDMX
Tijuana
San Luis
Potosí
Tampico
Cd. Juárez
Fuente: CRE
new retailers
27service stations
1,725share
15%
Upcoming retailers
Guadalajara
Puebla
14
2. Next steps
Mexico’s five-year plan identifies 509 exploration and production blocks and 82 production fields
15
16
The upcoming offshore bidding cycles build on previous success
Source: SENER
Acreage: 30,440 mi2
Considers blocks nominated by companies
blocks29boe in prospective resources4.2
BILLION
32
times the acreage in Round 1
times the resources in Round 1
Deep waterRound 2.4
Perdido Fold Belt
Mexican Ranges
Salt Basin
17
The upcoming offshore bidding cycles build on previous success
Source: SENER
Considers blocks nominated by companies
High oil and natural gas potential
blocks29boe in prospective resources4.2
BILLION
32
Acreage: 30,440 mi2 Deep waterRound 2.4
Perdido Fold Belt
Mexican Ranges
Salt Basin
times the acreage in Round 1
times the resources in Round 1
18
The upcoming offshore bidding cycles build on previous success
Source: SENER
Considers blocks nominated by companies
Shallow waterRound 3.1
blocks35boe in prospective resources2
BILLION
22
times the acreage offered in allprevious shallow water rounds
times the resources awarded in allprevious shallow water rounds
Southeast Basin
Tampico – Misantla Veracruz
Burgos
Acreage: 10,140 mi2
19
The upcoming offshore bidding cycles build on previous success
Source: SENER
blocks35boe in prospective resources2
BILLION
22
times the acreage offered in allprevious shallow water rounds
times the resources awarded in allprevious shallow water rounds
Considers blocks nominated by companies
High crude oil and natural gas potential
Acreage: 10,140 mi2 Shallow waterRound 3.1
Southeast Basin
Tampico – Misantla Veracruz
Burgos
Blocks from 2.4 and 3.1 are distributed in the country’s six main oil provinces…
Perdido Fold Belt
Mexican Ranges
Salt Basin
Southeast Basin
Tampico – Misantla Veracruz
Burgos
20
…and interact with the blocks awarded in Round 1.1…
Exploration Discovery
+ 2 Billion boe
21
…Round 1.2…
Exploration Discovery
+ 1.4 Billion boe
22
…Round 1.4…
23
…Round 2.1…
24
…Pemex’s blocks…
25
…and Pemex’s farm-outs
26
All blocks have improved 2D and 3D seismic coverage
27
28
Round 2.4 creates clusters to achieve economies of scale...
PERDIDO FOLD BELT• 9 blocks offshore the coast of Tamaulipas• Light oil and dry gas
Block Surface (km2)Prospective Resources
(Million Boe)
WaterDepth
(Meters)
1 1,988 171 500 - 1,000
2 2,146 76 1,000 - 2,000
3 2,062 115 1,000 - 2,500
4 1,900 40 400 - 2,000
5 2,733 252 2,500 - 3,000
6 1,891 171 300 - 1,500
7 1,968 17 1,000 - 2,000
8 2,062 13 2,000 - 2,500
9 2,009 92 1,500 - 2,000
Subtotal 18,758 949
Source: SENEROil
Dry gas Wet gas
29
… includes a basin with natural gas potential for further exploration…
MEXICAN RANGES• 10 blocks offshore the coast of Veracruz • Dry and wet gas and light and ultra light oil
Block Surface (km2)Prospective Resources
(Million Boe)
WaterDepth
(Meters)
10 1,999 100 400 – 2,000
11 2,002 182 400 – 1,500
12 3,099 215 1,500 – 3,000
13 1,967 179 300 – 1,500
14 2,242 180 1,500 – 2,000
15 2,042 180 400 – 2,000
16 2,047 131 500 – 1,500
17 3,010 131 300 – 2,000
18 2,917 412 2,000 – 2,500
19 3,003 281 200 – 2,000
Subtotal 24,328 1,992
Source: SENEROil
Dry gas Wet gas
30
…and areas that leverage nearby infrastructure and active blocks
SALT BASIN• 5 blocks offshore the coast of Veracruz• 5 blocks offshore the coast of Tabasco• Light and heavy oil and wet gas
BlockSurface (km2)
Prospective Resources(Million Boe)
WaterDepth
(Meters)
20 2,080 199 2,500 – 3,000
21 2,030 327 2,000 – 3,000
22 2,879 101 1,000 – 2,500
23 1,853 131 2,000 – 3,000
24 1,922 100 1,500 – 3,000
25 2,107 12 1,500 – 2,500
26 2,030 67 1,500 – 2,000
27 2,118 68 1,000 – 2,000
28 3,067 106 1,000 – 1,500
29 3,254 176 400 – 2,000
Subtotal 23,339 1,287
Source: SENER
Oil
Wet gas
31
Similarly, Round 3.1 builds clusters with nearby active areas…
Source: SENER
BURGOS• 14 blocks on the Tamaulipas coast• Mainly light oil and wet gas
BlockSurface(km2)
Prospectiveresources
(Million boe)
WaterDepth
(meters)
1 802 85 < 200
2 816 102 < 200
3 809 60 < 200
4 778 42 < 200 a 500
5 814 36 < 200
6 820 31 < 200 a 500
7 391 71 < 200
8 390 20 200 a 500
9 397 19 < 200
10 419 19 < 200
11 391 23 < 200
12 811 48 < 200 a 500
13 392 15 < 200
14 392 8 < 200
Subtotal 8,424 579 -
Oil
Dry gas Wet gas
TAMPICO – MISANTLA• 13 blocks on the Veracruz coastline• Light oil, dry and wet gas
BlockSurface(km2)
Prospectiveresources
(Million boe)
WaterDepth
(meters)
15 962 42 < 200
16 785 35 < 200 a 500
17 842 34 < 200 a 500
18 813 89 < 200
19 808 45 < 200 a 500
20 817 30 < 200
21 1,103 284 < 200
22 1,138 156 < 200
23 820 31 < 200
24 791 103 < 200 a 500
25 1,170 80 < 200
26 1,225 145 < 200
27 1,218 144 < 200
Subtotal 12,493 1,217 -
32
…includes areas with potential in the historic Golden Belt…
Source: SENEROil
Dry gas Wet gas
33
…and takes advantage of supply chains and infrastructure
Source: SENER
SOUTHEAST BASIN
• 2 blocks on the Veracruz coastline• 4 blocks on the Tabasco coastline• 2 blocks on the Campeche coastline• Mainly light and heavy crude oil
BlockSurface(km2)
Prospectiveresources
(Million boe)
WaterDepth
(meters)
28 808 31 < 200 a 500
29 471 0 < 200
30 528 20 < 200
31 401 51 < 200
32 1,027 64 < 200 a 500
33 581 5 < 200
34 734 8 < 200
35 798 13 < 200
Subtotal 5,348 192 -
Oil
Wet gas
34
In addition, PEMEX will offer a new deep-water farm-outopportunity
* To be certified
Source: CNH y PEMEX
PEMEX’s stake: 40% to 60%
Seeks to attract state-of-the-art technology, expertise and best practices
Risk sharing with new partners
3P Reserves: ≈ 500 Million boe*
Nobilis – MaximinoDeep-water
35
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Mill
ion
cu
bic
fe
et (
MM
cf)
Pemex contract release program
Source: CRE
Phase 1700 MMcf
(20%)Phase 2
700 MMcf(20%)
Phase 31,100 MMcf
(30%)
PEMEX contracts
1,100 MMcf(30%)
OriginalPEMEX
contracts 3,600 MMcf
(100%)
February2017
From 2017 to 2021
By 2021
More competitors will enter the natural gas market, as regulation requires Pemex to cede market share
70%of contract-holders will choose a new marketer
36
The new storage policy sets inventory requirements and will promote new infrastructure
days of supply by 2020 From to
days of supply by 2025Up to13
million barrels by 20257.8 19.6to
3 5
From
37
Motor fuels’ price liberalization will conclude by the end of 2017
Source: CRE
2
October 30th3
December 30th5
Free market prices1
November 30th4
~ Ecuador’s market
~ Colombia’s market
~ Puerto Rico’s market
~ Spain’s market
~ Uruguay’s market
Free market prices
1
5
2
34
6
38
Private investment is already driving the expansion of Mexico’s storage capacity…
* Includes storage both for logistic and storage projects** Does not include investment on rail-road logistics of refined oil products
8
Storage
5.3mmb
New companies
Projects approved by CRE9
Additional storage capacity*
New storage capacityin operation
$348 million
Investment
335 kb
Source: CRE
7
9
39
… and of combined storage-transportation infrastructure
Source: CRE
storage capacity
transportation capacity
investment$3.4 billion
12,882 kb
500kbd
40
Mexico’s new oil and gas sector is creating unprecedented business opportunities
* Including 19 companies with investments in ducts, storage terminals and railroad infrastructure and 26 natural gas marketers
Sources: CRE, CNH y SENER.
Exploration and production companies67Seismic research companies20Pipeline construction companies11Storage and distribution companies*45
billion
$2 billion
$61
billion$12billion$4
New companies143 billion$79
Without public funds| Without public debt| Sharing risks