cycles & trends 2015€¦ · important economic growth in 2015 as result of implementation of...
TRANSCRIPT
Cycles & Trends
2015
Reforms in action
Table of Content
Chapter 1 Mexico competitive advantages
Chapter 2 Mexican Energy Reform Chapter 3 Round Zero & Round 1
Chapter 1
Mexico competitive advantages
The International Monetary Fund
forecasts that Mexico will have an
important economic growth in
2015 as result of implementation
of structural reforms.
The IMF has mentioned that
advanced economies present
moderate growth, like Japan and
Eurozone, meanwhile, United
States will advance faster.
The economic expansion in US
will benefit Mexico, by increase of
Mexican exports to the North
America market. External demand
will impulse rest of supply internal
chains.
Mexico will register increase growth in 2015
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2012 2013 2014 2015
EEUU
México
Mundo
México en la tendencia económica global(PIB real)
Source: IMF, World Economic Outlook (WEO) 2015
Mexico in the global economic trend
(real GDP)
Benefits of structural reforms in the
GDP
2.7 2.5
3.3 3.4 3.3 3.5
0.2
0.2 0.2 0.20.2
0.4
0.71 1.1
1.2
0.3
0.4
0.4 0.4
0.4
0.3
0.3
0.2 0.2
0.2
0
1
2
3
4
5
6
2014 2015 2016 2017 2018 2019
PIB de México a mediano plazo, 2014-2019(Contribución de las reformas estructurales al crecimiento económico)
Total
2.7
3.7
4.9
5.2 5.2
5.5
Inercial
(sin
reformas)
Fiscal
Energética
Financiera
Telecomunicaciones
Source: Estudio Económico de México 2015, OCDE, enero de 2015
The OECD considered on its report of January 2015 that the reforms
implemented in Mexico rise up to 2 percentage points the GDP in the
medium term. With reforms, some segments have been opened to
competition like telecommunications and energy.
Mexico GDP at medium term, 2014-2019
(contribution of structural reforms to economic growth)
The Council of Financial System
Stability, Bank of Mexico and
Finance Ministry, have concluded
that oil insurance covering will
mitigate effects of the fall on
international oil prices on the
balance of payments and public
finance.
Fiscal and Monetary discipline will
allow to continue with
macroeconomic balance for 2015.
In addition, accumulation of
international reserves and the
flexible credit line of IMF (70,000
million USD) will mitigate external
shocks.
Mexico. Macroeconomic balance
-50,000.0
0.0
50,000.0
100,000.0
150,000.0
200,000.0
250,000.0
300,000.0
350,000.0
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Remesas
Petróleo
Manufacturas
Inversión Extranjera Total
Turismo
Principales ingresos de divisas al país
(millones de dólares)
20
14
, d
ato
s a
l II
I tr
ime
str
e
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
MMusd
0.0
20,000.0
40,000.0
60,000.0
80,000.0
100,000.0
120,000.0
140,000.0
160,000.0
180,000.0
200,000.0
Reservas Internacionales Netas
(millones de dólares)
201
4,
dato
s a
l II
I tr
ime
str
e
Source: Banco de México, INEGI
Net International Reserves
(million USD)
Main foreign currency income
(million USD)
14.7
3
12.7
7
13.1
7
9.6
6
6.4
23.3
8
13.5
1
11.1
3
12.4
2
11.2
9
10.7
9
9.5
6
9.1
4
7.9
2
2.8
1
2.2
7
1.3
7
0.0
5
-1.00
1.00
3.00
5.00
7.00
9.00
11.00
13.00
15.00
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Tipo de cambio, FIX
(pesos por dólar)
61.5
9
96.0
5
69.5
3
44.9
9
34.7
6
19.2
8
14.1
0
48.4
4
31.3
9
24.7
6
15.2
4
44.4
1
3.7
5 3.0
2
4.2
4
4.2
4
7.1
9
6.2
3
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Tasa de Interés, Cetes
(tasa de rendimiento nominal anual)
10
6.5
3
86
.03
60
.21
10
8.2
1
16
7.0
6
74
.82
30
.75
12
.04
7.0
7
55
.39
28
.21
18
.82
3.8
1
4.1
1
4.0
1
3.4
1
5.1
2
3.6
3
4.5
6
9.5
1
-10.00
20.00
50.00
80.00
110.00
140.00
170.00
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Tasa de Inflación
(tasa de rendimiento nominal anual)
579605
371 366
317
245
190
156
121107
228
261
154 159 158 161 153
0
100
200
300
400
500
600
700
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
México: Riesgo País, 1998‐2014(Índice de bonos de mercados emergentes, EMBI+ JP. Morgan)
Main stable macroeconomic
indicators
Source: Banco de México, INEGI
Exchange Rate
(million USD)
Inflation Rate
(annual return rate)
Interest Rate, Cetes
(annual return rate )
Mexico: Risk 1998-2014
(Emerging Market s Bond Index, EMBI+JP. Morgan)
-15
-10
-5
0
5
10
15
Primarias
Secundarias
Terciarias
Primarias 0.2 -11.1 3.3 0.2 5.8 13.4 -0.1 8.5 -2.2 2.6 0.8 -0.2 2.6 2.5 7.3
Secundarias 3.8 3.3 2.8 3.9 4.1 3.5 2.5 0.9 -1.6 -0.3 -0.5 -0.4 1.8 1.1 2
Terciarias 5 4 5.1 4.8 5.3 4.6 3.7 4.6 2.1 2.6 2.5 1.3 2 1.9 2
I II III IV I II III IV I II III IV I II III
2011 2012 2013 2014
Economía mexicana por actividad económica (PIB real)
Mexican economy register an increased expansion
The production recovery begins with exports increasing, afterwards, with increase of governmental
expenditure and investments at end of 2014. 2.1 2.5
1.3
-1
-7.4
-9.6
-5.5
-2
3.7
6.7
5.4
4.6
4.5
3.2 4
.2 4.3 4
.9
4.5
3.2 3.4
0.6 1
.6
1.4
0.7
1.9
1.6 2
.2
-12
-10
-8
-6
-4
-2
0
2
4
6
8
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III
2008 2009 2010 2011 2012 2013 2014
Economía mexicana por trimestre, 2008-2014
(PIB real)
-10
-5
0
5
10
15
20
25
30
Total Consumo Privado
Consumo Gobierno Inversiones
Exportaciones
Total 6.8 11.2 8.5 6.8 5.9 4.6 5.1 4.1 5.2 4.6 2.9 4.4 0.2 2.2 1.6 0.4 2.7 2.1 3
Consumo Privado 4.4 7 4.9 4.8 4.7 4.2 6.3 4.3 7.3 4.5 3.1 4.1 1.9 3.9 2.9 1.4 1.6 1.3 2.2
Consumo Gobierno 0.8 2.4 1.8 1.8 2.3 0.7 2.9 4.2 4.3 4.4 2.5 2.2 0.3 0.2 2 2 2.9 1.9 3.2
Inversiones -2.8 2 2.2 3.4 7.6 7.8 8.8 7.5 6 5 4.1 3.4 -0.9 0.8 -3.6 -3 -0.5 -0.6 4.3
Exportaciones 16.3 27.3 23.9 15.5 14.4 9.4 6.5 3.5 8.1 13.5 3.5 -1.1 -4.4 -1.8 5.6 5.8 6.4 5 7.1
I II III IV I II III IV I II III IV I II III IV I II III
2010 2011 2012 2013 2014
Demanda global de bienes y servicio
(variación porcentual)
-5
0
5
10
15
20
25
30
35
Total
PIB
Importaciones
Total 6.8 11.2 8.5 6.8 5.9 4.6 5.1 4.1 5.2 4.6 2.9 4.4 0.2 2.2 1.6 0.4 2.7 2.1 3
PIB 3.7 6.7 5.4 4.6 4.4 3.2 4.1 4.2 4.8 4.4 3.1 3.3 0.6 1.6 1.4 0.6 1.9 1.6 2.2
Importaciones 19.8 29.2 19.8 14.4 11.5 9.3 8.5 3.5 6.4 5.3 2.1 7.8 -0.9 4.3 2.5 -0.2 5.2 3.5 5.6
I II III IV I II III IV I II III IV I II III IV I II III
2010 2011 2012 2013 2014
Oferta global de bienes y servicio
(variación porcentual)
Source: INEGI
Mexican Economy by quarter, 2008-2014
(real GDP)
Mexican Economy by activity
(real GDP)
Mexican Economy by quarter, 2008-2014
(real GDP) Global demand of goods and services
(percentage change)
Global demand of goods and services
(percentage change)
The World Economic Forum has classified Mexico as a transition economy from emerging to developed
country. Listed among competitive advantages of the country: highlight market size, macroeconomic
balance, health, and, basic education.
Ranking Mundial de Competitividad 2014-2015
4.27
5.29
5.35
5.41
5.41
5.45
5.46
5.47
5.49
5.5
5.54
5.65
5.7
0 1 2 3 4 5 6
México
Dinamarca
Noruega
Suecia
Reino Unido
Países Bajos
Hong Kong
Japón
Alemania
Finlandia
EEUU
Singapur
Suiza 1
2
3
4
5
6
7
8
9
10
11
13
61
Puntuación Lugar
3.64.1
5.1
5.7
4
4.2
3.9
4.2
3.7
5.6
0
1
2
3
4
5
6
7
Institutions
Infrastructure
Macroeconomic environment
Health and primary education
Higher education and training
Goods market efficiency
Labor market efficiency
Financial market development
Technological readiness
Market size
Global Competitiveness Index
0 2 4 6 8 10 12 14 16 18 20
Inadequately educated workforce
Insufficient capacity to innovate
Tax rates
Inadequate supply of infrastructure
Restrictive labor regulations
Access to financing
Tax regulations
Inefficient government bureaucracy
Crime and theft
Corruption
The most problematic factors for doing business
Mexico potential
Source: World Economic Forum, The
Global Competitiveness Report 2014 - 2015
Competitiveness world ranking 2014-2015
Doing Business 2015 report, reveals that Mexico is among the forty best economies in the world in terms of
improve business regulations. Some competitive advantages are: affordable credits, insolvency resolution
and contract compliance.
Competitiveness for doing business
0 20 40 60 80 100
México
Islandia
Suecia
Australia
Finlandia
Reino Unido
EEUU
Noruega
Corea del Sur
Dinamarca
Hong Kong
Nueva Zelandia
Singapur
Falicidad para hacer negocios 2015
(clasificación mundial)Lugar
1
2
3
4
5
6
7
8
9
10
11
13
39
0
20
40
60
80
100
120
Apertura de un negocio (67)
Manejo de permisos de construcción
(108)
Obtención de Electricidad (116)
Registro de propiedades (110)
Obtención de crédito (12)
Protección de los inversionistas
minoritarios (62)
Pago de impuestos (105)
Comercio transfronterizo (44)
Cumplimiento de contratos (57)
Resolución de la insolvencia (27)
Temas del Doing Business 2015
Comparativo en la apertura de un negocio
Indicator Mexico City Latin
America
OECD
Procedures (number) 6 8.3 4.8
Time (days) 6 30.1 9.2
Cost (% per capita income) 20 31.1 3.4
Requirement of minimum paid-up
capital (% per capita income)
0 3.2 8.8
Source: World Bank Group, Doing Business 2015
Doing Business 2015
(world classification)
Doing Business - Topics 2015
Starting a business (Comparative)
Mexico comparative advantages Mexico is a country that offers excellent investment opportunities. Besides, Mexican government is
implementing structural reforms in order to promote sustainable development .
Other advantages of Mexico
North America Free Trade Agreement
Mexico has a Free Trade Agreement with US and Canada
since 1994. This market represents the largest free trade
area with about a third of world GDP.
Mexico has a network of 10 FTAs with 45 countries, 30
Reciprocal Investment Promotion and Protection
Agreements (RIPPAs) and 9 trade agreements (Economic
Complementation and Partial Scope Agreements) within
the framework of the Latin American Integration
Association (ALADI
12.6 13.6 15.2 14.3 16.619.7
25.8
34.9
48.2
66.8
81.2
91.297.5
103.3
112.3
119.7 122
0
20
40
60
80
100
120
140
1895 1900 1910 1921 1930 1940 1950 1960 1970 1980 1990 1995 2000 2005 2010 2014 2050
Población total en México 1895-2050
(millones de personas)
About 55% of Mexican population is young, less than 30 years. This
competitive advantage is called demographic dividend and will continue
for the next 20 years. Currently, population on working age represents
64%; in the next two decades will amount 80 million people representing
60%.
Source: INEGI, CONAPO, PROMEXICO, BANCOMEXT
Mexico’s Population 1895-2050
(million inhabitants)
Economic Perspectives The Mexican Finance Ministry has estimated real value of GDP for 2015 an annual growth of 3.7%,
Estimation is according projections of international organisms.
PIB Inflación Déficit
Público/PIB
Tipo de
Cambio
Tasa de Interés Precio del
Petróleo
Producción
Crudo
Exportación
Crudo
Marco macroeconómico, 2015
3.7%
3%
-1%
79 dólares
por barril
2.4
MMbd
13.40pesos
por dólar
3.3%CETES
1.09
MMbd
Source: SHCP
Macroeconomic Framework 2015
Mexico will recover its growth potential with reforms.
2.3
%
3.4
%
4.8
% 5.2
%
5.3
%
5.4
%
5.5
%
4.7
%
6.5
% 6.9
% 7.2
%
7.3
%
7.4
%
7.5
%
1.4
%
4.0
%
5.9
%
6.5
% 7.0
% 7.3
%
7.5
%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2014 2015 2016 2017 2018 2019 2020
Consumo
Exportaciones
Inversión
Demanda agregada para el mediano y largo plazo
(porcentuaje anual)
6.0
-1.0
0.1
1.4
4.1
3.2
5.2
3.3
1.2
-6.0
5.25.24.9
3.7
1.4
5.3
3.93.9
2.7
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8
2000 2010
Economía mexicana 2000-2018(% PIB anual )
Proyección Histórico
Midd term Perspectives
0
1
2
3
4
5
6
7
Inflación 3 3 3 3 3 3
Tasa de interés 3.3 3.9 4.5 5 5.5 5.9
2015 2016 2017 2018 2019 2020
Tasa de Interés
Inflación
Escenario macroeconómico a mediano plazo
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
Cuenta Corriente (% del PIB) -2 -2 -2.1 -2.1 -2.1 2
2015 2016 2017 2018 2019 2020
Cuenta Corriente a mediano plazo
(% del PIB)
Source: SHCP
Mexican Economy 2000-2018
(% GDP annual)
Macroeconomic Scenario at medium term Current account at medium term
(% GDP)
Aggregate demand mid and long term
(annual percentage)
Expenditure Budget, 2015 The net expenditure for 2015 is 1.2% more than budget for 2014.
2.3 3 5.1 8.1 17 20.9 27 33.7 45.671.2 67.9 77.7 87.8
126.1 114.5134.9
208.7
305.5 314.4
497.6
540.5
0
100
200
300
400
500
600
Pre
sid
en
cia
de
la R
ep
úb
lica
En
erg
ía
Tra
bajo
y
Pre
vis
ión
So
cia
l
Rela
cio
nes
Exte
rio
res
PG
R
Eco
no
mía
Mari
na
CO
NA
CY
T
Hacie
nd
a y
Cré
dit
o P
úb
lico
Defe
nsa
Nacio
nal
Sem
arn
at
Go
bern
ació
n
Sag
arp
a
Co
mu
nic
acio
nes
y T
ran
sp
ort
es
Desarr
oll
o
So
cia
l
Salu
d
ISS
ST
E
Ed
ucació
n
Pú
bli
ca
CF
E
IMS
S
Pem
ex
Presupuesto de Egresos de la Federación, 2015
(miles de millones de pesos)
Source: SHCP
Federation Expenditure Budget 2015
(thousand million pesos)
Insecurity and Corruption Different international and national institutions have warned that insecurity and corruption have become
one of the main obstacles to productive activities.
0
10
20
30
40
50
60
70
80
90
100
Din
am
arc
a
Nu
eva
Ze
lan
dia
Fin
lan
dia
Su
ecia
No
rue
ga
Su
iza
Sin
ga
pu
r
Pa
íse
s
Ba
jos
Lu
xe
mb
urg
o
Canadá
Au
str
alia
Ale
ma
nia
Isla
nd
ia
Mé
xic
o
Ranking Mundial de Corrupción
1 2 3 4 5 5 7 8 9 10
103
11 12 12
Transparency International has positioned Mexico in place
number 103 in a list of 175 countries, once obtained a
punctuation of 35 over 100, on its Report 2014.
Prevalence rate of crimes by entity
La Encuesta Nacional de
Victimización y Percepción
sobre Seguridad Pública
registró 28.2 millones de
victimas en todo México
Víctimas por cada 100,000 habitantes
Rangos de
victimas
12,294
9,790
4,973
3,981 3,808
2,689
1,524 1,304 1,199
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Robo en la calle Extorsion
(telefónica)
Robo a
vehículos
Fraude Amenazas Roba a casas Diferentes robos Lesiones Otros delitos
(secuestros,
sexuales)
Incidencia Delictiva — Tipos de delito en México
(Tasa de delitos)Víctimas por cada 100,000 habitantes
Estudio sobre
seguridad presentado
en septiembre-2014
Source: Transparency International, INEGI
Corruption – Worldwide Ranking
Crime incidence –Types of crime in Mexico
(crime rate)
Victims per 100,000 inhabitants)
Mexican Energy Reform
Chapter 2
New energy market
Energy Reform Secundary Laws
Define functions of Ministries, Regulators, Operative Entities
and Operators
SENER (Energy Ministry) SHCP (Finance Ministry)
Manages resources from exploration and production
through Mexican Oil Fund
Regulator entities Operadotors Entities
Compañías operadoras
Other participants
(private companies)
Source: Pemex
1.- National Hydrocarbons Commission
2.- Energy Regulatory Commission
3.- National Agency of Industrial Security
and Environmental Protection of
Hydrocarbons Sector
4.- National Center of Energy Control
5.- National Center of Natural Gas Control
6.- Federal Electricity Commission
Establishes energy policy and coordinates regulator entities
through Coordinating Council of Energy Sector
Mexican Energy Reform was approved on December 2013, and Secondary Laws were enacted on
August 2014. This reform has completely changed energy sector in the country. A new stage of
competitiveness, but maintaining State rectory on resources.
Hydrocarbons Market
Activities of Hydrocarbons Sector
Strategics No strategics
Hydrocarbons
exploration and
extraction
Entitlements with Productive
State Companies (Pemex y
CFE)
Contracts with Productive
State Companies and with
private companies
Transformation
Logistic
Other activities of
the value chain
Participation of private sector by permits
Source: Sener
Hydrocarbons Exploration &
Production New paradigm
Source: Pemex; Congreso de la Unión; SENER
Entitlements and contracts
Entitlements Licences Production and profit share Services
Only apply for
Productive State
Companies
Apply to Productive State Companies and private contractors
Contracts
Fiscal regime of Productive State Companies and private sector
License contracts Sharing Production
Contracts & Profit Sharing
Contracts
Service Contracts
• Income tax
• Tax for exploration &
extraction activity
• Contractual Fee
• Royalty
• Signature Bond
• Compensation
• Income tax
• Tax for exploration & extraction
activity
• Contractual Fee
• Royalty
• Compensation
Income tax
Tax for exploration
& extraction activity
Cash compensation
Pemex. New structure
Source: Pemex; Sener; Congreso de la Unión
State Productive
Company
Autonomy of budget,
management,
technical and
operative
General Director
Corporate
Government
Executive Board
5 Independant Advisors
Designed by the Executive
Power and ratified by the
Senate.
Ministers of SENER and
SHCP
3 Advisors of the Federal
Government
Productive State Company
Subsidiaries Filials
They are also productive
state companies with legal
personality and its own
assets. Their organization
and operation will be
subject to Pemex
They are those in which
Pemex participates directly
or indirectly with more than
50% of its share capital,
regardless are constituted
under Mexican or foreign
Law
Exploration &
production
Industrial
Transformation
Drilling
Logistic &
transportation
Electric
Cogeneration
Pemex strategy, 2015 Pemex commitments according National Development Plan 2013 - 2018, are focused on National Goal
Nr. 4 “Mexico, prosperous", Objective 4.6 “Supply with energy to the country at competitive prices, quality
and efficiency in the value chain" and according Strategy 4.6.1 “Guarantee supply of crude oil, natural
gas and petroleum products that Mexico demands".
2,400 Mbd
1,204 Mbd1,092 Mbd
498 Mbd
6,530 MMpcd
2,192 MMpcd
Producción
petróleo crudo
Mercado
interno
Exportaciones
petroleras
Importación
petrolíferos
Producción
gas natural
Importación
gas seco
Estrategia Programática de Pemex para 2015
(principales metas)
With Energy Reform, Pemex Exploration and
Production has become a State Productive Company
and is named Subsidiary Productive Company
“Exploración y Producción”.
Source: SHCP, Presupuesto de Egresos 2015
Pemex Programmatic Strategy 2015
(main goals)
Pemex Budget by economic classification
(pesos & percentage structure)
Expenditure Budget of Federation, 2015 Budgetary Programs and Investment Projects for Pemex Exploration &
Production
985
1,735
1,784
1,985
2,835
2,926
3,348
3,579
3,641
3,941
4,122
4,417
4,904
5,418
5,692
5,803
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Integral Arenque
Proyecto Aceite y Gas en Lutitas
Proyecto Costero Terrestre
Proyecto de Exploración Cuichapa
Proyecto Tamaulipas Constituciones
Adquisición de 5 plataformas autoelevables
Proyecto de Exploración Uchukil
Proyecto de Exploración Holok
Integral Jujo-Tecominoacán
Proyecto de Exploración Comalcalco
Proyecto Ixtal-Manik
Integral Poza Rica
Proyecto Aceite Terciario del Golfo
Integral Lakach
Proyecto de Exploración Chalabil
Integral Cactus Sitio-Grande
PEP, Programas y Proyectos de Inversión, 2015
(millones de pesos)
5,850
6,103
6,666
6,915
7,008
7,513
8,491
9,033
9,671
10,461
11,208
14,118
20,119
23,992
30,914
53,599
0 10,000 20,000 30,000 40,000 50,000 60,000
Integral El Golpe-Puerto Ceiba
Proyecto de Exploración Campeche Oriente
Proyecto Integral Veracruz
Integral Ek-Balam
Burgos
Proyecto Ogarrio - Sánchez Magallanes
Integral Bellota-Chinchorro
Integral Yaxche
Proyecto de Exploración Area Perdido
Delta del Grijalva
Integral Complejo Antonio J. Bermudez
Proyecto Crudo Ligero Marino
Integral Chuc
Proyecto Tsimin Xux
Cantarell
Integral Ku-Maloob-Zaap
PEP, Programas y Proyectos de Inversión, 2015
(millones de pesos)
Source: SHCP, Presupuesto de Egresos 2015
Pemex E&P Investment Programs and Projects, 2015
(million pesos)
Pemex E&P Investment Programs and Projects, 2015
(million pesos)
Chapter 3
Round Zero & Round 1
Round Zero On august 2014, SENER (the Mexican Energy Ministry) has awarded Pemex 489 assignments, 108 for
exploration and 381 for extraction, that allows to the company continue carry out exploration and
extraction activities in the short, medium and long term.
Pemex has requested 34,800
Mmboe in prospective
resources, which represents
31% of total in the country, and
20,589 MMboe in reserves 2P,
83% of total reserves 2P.
Result:
It has been assigned to
Pemex a total area of 90,000
square kilometers.
Pemex will maintain current
level of oil production for next
20 and a half years.
With this result, Pemex is in
the 5° place in terms of
proven reserves, among the
companies reporting to
financial markets.
Resultados de la Ronda Cero
Source: SENER
Round Zero results
Round Zero
Results
Source: Pemex
Strategic Alliances
Based on the Transitional Twenty-Eighth of the Hydrocarbons Law, Pemex and its contractors
may request the migration of Comprehensive Contract for Exploration and Production (CIEP)
and the Public Works Contracts Financed (COPF), to new forms of contracts for the
Exploration and Extraction.
With this migration, the government seeks better alignment of incentives between Pemex
and its contractors for best results.
Contractors with good performance may have access to better economic conditions without
affecting the balance of the expected revenue for the state.
To take advantage of associations,
Pemex has designed a strategy that
covers 3 fronts:
1) Migration of existing contracts, CIEPS
or Integrated contracts of Exploration &
Production, and the COPF or Financed
Public Work Contracts, to the new
contractual schemes. These fields are not
subject to competition because they
already have a contractor, and these
contracts have been tendered.
2) In short term, seek of partners in
order to develop fields that were
awarded to Pemex in Round Zero.
3) Pemex is working in definition of those
associations that can strengthen its
competitive position, and that means the
development of technical and
organizational skills in order to compete in
Round 1 and subsequent.
Article 13 of Hydrocarbons Law establishes that Pemex can celebrate alliances or
associations with other companies in order to operate allocations that has decided migrate as contracts.
CIEP y COPF
Source:
Migración de asignaciones a contratos y esquema de asociaciones (farm outs). Exposición del Director General de Pemex Exploración y Producción, Mtro.
Gustavo Hernández García, durante el evento de presentación de las Rondas Cero y Uno de la Reforma Energética, llevada a cabo en la Ciudad de
México, en agosto de 2014. Discurso del Director General de Pemex, Mtro. Emilio Lozoya, en el mismo evento. Secretaría de Energía. Ficha Técnica sobre
Asociaciones.
Migration of
CIEP’s to
Contracts
Farm outs
1rst stage
11 contracts
2nd stage
11 contracts
Farm Outs Pemex has identified ten associations (farm outs) for short, midd and long term around four topics.
The farm outs constitute a group of projects with high technical complexity, capital intensity or other strategic
considerations inside Pemex portfolio. These projects can include participation of private companies that complement
capital, knowledge and operative capacity.
Source: Migración de asignaciones a contratos y esquema de asociaciones (farm outs). Exposición del Director General de Pemex
Exploración y Producción, Mtro. Gustavo Hernández García, durante el evento de presentación de las Rondas Cero y Uno de la
Reforma Energética, llevada a cabo en la Ciudad de México, en agosto de 2014.
The 2P and 3P
reserves contained in
these fields amount
to approximately
1.556 billion barrels
of oil equivalent
(MMboe) and 2.664
MMboe, respectively.
These fields
development
development requires
an investment of
about 4.1 billion
dollars per year.
Round 1
The proposal for Round 1
contains a wide and diverse
selection of areas and fields
with different characteristics.
In Round One, 169 blocks will
be offered, 109 of them for
exploration and 60 for
production. The proposed
blocks cover a surface of
28,500 Km2. From that
amount, 91% represent
exploration areas, and the
remaining 9% is related to
extraction projects.
•The related 2P reserves and
prospective resources amount
to 3,782 and 14,606 MMboe,
respectively. It is estimated that
these projects will represent an
annual investment of close to
8,525 million dollars from 2015
to 2018.
Fields to be tendered in Round 1
Source: Pemex; Secretaría de Energía: Pemex
This Round has as objective provide potential in order to increase crude oil and natural gas
production in the short term; incorporate reserves and look for new areas to increase
prospective resources in Mexico.
Source: Pemex, October 2014
Shallow waters
Extra heavy crude
Chicontepec and non-conventional
In-shore
Deep waters
Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15
Bidding publication
Participant Registration and Data Room Opening
Contracts awarding
Ministry of Energy (SENER) to run social impact evaluation
Round 1 - Timetable
Round 1: Shallow waters
Technical Capabilities
1.Must demonstrate it has verifiable experience as Operator
during the period 2010-2014, regardless of whether the
project started before or ended within this period:
a) At least three exploration and extraction projects, or
b) Capital investments, in exploration and extraction
projects of at least one billion dollars in the aggregate.
2.Must demonstrate having been the operator in at least one
offshore exploration and extraction project or have
participated, as partner, in at least two offshore exploration
and extraction projects in the past five years.
3.Must demonstrate that the proposed personnel for key
management positions has at least 10 years of experience in
managing offshore exploration and extraction projects.
4. Experience in the areas of industrial safety and
environmental protection during the past five years
On December 2014, National Hydrocarbons Commission has published bidding terms of Round 1 of Exploration &
Production Contracts. This bidding includes 14 contractual areas in shallow waters.
Rules that define criteria that companies must follow:
1. Requirements
2. Processes
3. Deadlines
Requirements for the Operator
1.Prove a net worth of at least one billion dollars,
a. In case of a consortium, the operator must
demonstrate at least 600 million dollars.
Alternatively,
2. Demonstrate that it has:
a. Total assets of at least ten billion dollars, and
b. An investment-grade credit rating according to
any major rating agency.
Financial Capabilities
Source: CNH
Round 1: Shallow waters
Financial Capabilities
1. Must demonstrate a net worth of at least one billion dollars, this amount must be
achieved with equity of no more than three members of the Consortium
2. The Operator must own at least one third of the economic interests in the
Consortium.
3. No member of the Consortium may own a greater portion of the economic
interests than the Operator
Rules to promote competition
The following must be observed for the integration of a consortium:
1. No Company may take part in more than one consortium.
2. No Large-Scale Oil Company may associate with another Large-Scale Oil Company
in order to take part in a consortium.*
Economic Posture Maximum
Companies or consortia may submit Bids for up to five Contractual areas in the
Bidding Process.
* This restriction does not apply for deepwaters, extra heavy oil and unconventional
areas.
Requirements for Consortiums
Source: CNH
Round 1: 1rst Bid, Shallow Waters
Round 1: Shallow waters Contract Model of “Production Sharing Contract” in the first invitation to bid in 14
contractual areas in shallow waters.
Characteristics of Production Sharing Contracts
Contract Model
Widely used internationally.
Awareness about the costs of exploration and extraction, as well as the
technology normally used in shallow waters.
Designed to protect the interests of the State without reducing investors’
incentives.
State
Will receive the hydrocarbons production and use part of it to pay for
the exploration and production costs, and a reasonable return for the
contractor, as determined in the bidding process.
Contractor
Will carry out exploration and extraction at its own risk.
Will begin receiving payments only when production starts
Key Elements
Production Sharing Contracts; a model for companies bidding individually
and another one for consortia.
Awarded through public international bidding process and signed by the
State through CNH.
Establishes fiscal and economic terms, including an adjustment
mechanism in order to capture oil rent.
Defines the minimum percentage of local content as well as the work
program that needs to be fulfilled on a yearly basis.
Establishes obligations regarding industrial safety and environmental
protection risk management and insurance.
Internationally unprecedented transparency rules.
.
Production Sharing Contracts. Incentives to accelerate
reserves restitution and increase production
Exploration must be performed in up to 5 years.
Minimum work commitment
The drilling of at least 26 exploratory wells is expected in the next 36
months within this 14 exploration areas.
Gradual restitution to the State of non developed areas
50% of the non developed area will be returned in the 3rd year.
50% of the remaining area of the 3rd year, that is non developed, will
be returned in the 4th year.
100% of the remaining area of the 4th year, that is non developed,
will be returned in the 5th year.
Rent per km2 of the exploration area
An incentive to prevent idleness in exploratory areas.
Rescission and Controversy Resolution
Rescission
Administrative rescission as established in the Hydrocarbons Law.
Contractual rescission as established in the contract.
Corruption activities are sufficient cause for contractual rescission.
Controversies
• Administrative rescission: will be resolved exclusively by Mexican
Federal Courts.
• Other controversies: International arbitration in The Hague, under
the United Nations Commission on International Trade Law
(UNCITRAL) rules under Mexican Law.
• Conciliation and consultation mechanisms prior to the start of any
arbitration process.
Source: SENER
Round 1: 1rst Bid, Shallow Waters
Round 1: Shallow waters
Round 1: Shallow waters
Economic Conditions related to Fiscal Terms
Round 1: Shallow waters
Main Characteristics
Fiscal elements of contracts, as well terms and conditions of the bid
have been designed to guarantee capture of oil revenues.
Elements defined in the Law:
Corporate income tax 30%
Contractual payment during the
exploratory phase
First 60 months: 1,150
pesos per km2 , 2,750
pesos afterwards
Exploration & production activities tax 1,500 pesos per km2
during exploration,
6,000 pesos per km2
during extraction
Basic Royalties Variable formula that
depends on prices
Ring-fencing: at the level of the E&P
industry for Corporate income tax, and at
the contract level for contractual
payments.
Elements defined on the bidding rules:
Cost recovery limit Up to 60% of income per period
Adjustment mechanism Defined formula
First-price Sealed-Bid Auction
Clear, transparent & simple award mechanism.
It’s the most common mechanism used around the
world: Angola, Brazil, Canada, United States,
Indonesia, Nigeria, Peru and Venezuela, among
others.
Bidding Mechanism
Bidders will produce a sealed envelope for each and
every block, specifying their offer or otherwise declining.
All envelopes will be delivered at the beginning of the
auction. Once delivered, the offers shall not be modified.
The winner will be named during the event, although the
Ruling will be formalized at a later date.
Source: SHCP
Round 1: Shallow waters Fiscal elements. Bidding variables
Bidding Variables
The bidding variables will be:
The State share of production.
Additional investment, over the minimum investment commitment
for each Area.
The award is done following objective criteria based on a
predefined formula.
The winner will be the bidder with the highest weighted value on
the economic proposal (V), calculated as follows:
V = 0.90 * State Share + 0.10 * Additional Investment
Tiebreakers
1. Cash payment and
2. Coin flip
Reserve prices
The minimum reserve price will be
established in advance.
Adjustment Mechanism
The Contract includes the
formula for the Adjustment
mechanism.
The formula is continuous to
avoid distortions.
Cost Recovery Limit
Costs will be recovered, up to
60% of the income generated on
each period.
When cost is under 60%, only the
effectively incurred costs will be
recovered.
This feature guarantees an early
flow of resources to the State.
Fiscal Regime – Other provisions
Controls for determine
recoverable costs
Accounting rules for registering costs, expenses and investments.
Cost concepts which are recoverable are established (already
provided in the Law).
In order to recognize recoverable costs, they must:
• Be supported by CNH-approved exploration & development plans.
• Reflect market conditions.
External audits to guarantee compliance with financial information
norms.
Audits by SHCP, SAT & CNH.
Procurement Guidelines
Established to guarantee market prices in the procurement of
goods & services by the contractor, following OCDE Transfer
Pricing guidelines.
Expenses above 20 million dollars require through bidding
processes.
Interaction with the Mexican Oil Fund
Rules, dates and terms to receive and review the information
related to contractual payments calculation and settlement.
Information records will be established using electronic systems
and electronic signature.
Production Sharing Contracts
Source: SHCP
Structure of contractual process
Round 1 & Farm-out
Structure of contractual process
Round 1 & Farm-out
Downstream. Project portfolio
Source: Pemex
Transoceanic Corridor Project- Istmo de Tehuantepec Pemex has invested 1,400 million dollars on pipelines, port infrastructure and storage to transport natural gas from
Terminal Pajaritos located in Coatzacoalcos, Veracruz, to Salina Cruz, in Oaxaca, in order to supply fossil fuels to South
region of Mexico, and for exports to Asia, North and South America, becoming a profitable project due to reduction of cost
and time using Panama Canal route.
Source: Pemex – Downstream. Houston, 2014
Infrastructre Projects of natural gas
Source: Pemex – Downstream. Houston, 2014
Projects for liquefaction natural gas
market 2014-2021
Source: Pemex – Downstream. Houston, 2014
Energy Reform Benefits in oil
production
Source:
U.S. Energy Information Administration, International Energy Outlook 2014
U.S. Energy Information Administration, International Energy Outlook 2013
As result of Energy Reform in Mexico, the EIA has reviewed an upward trend expectativas de
crecimiento a largo plazo de la producción petrolera de México.
1.961.83
1.97 2.032.11
2.92
3.11
3.303.48
3.74
2.60
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2010 2020 2025 2030 2035 2040
Antes de la reforma energética Con reforma energética
EIA: Proyección de la producción petrolera de México a largo plazo
(millones de barriles diarios)EIA: Oil production projection in Mexico at long term
(million barrels per day)
Long term Oil production in Mexico,
with energy reform
Source: Sener
Pemex Exploration & Production investment portfolio 2014, has anticipated to maintain production up to 2.5 MMboe (including
production from the company, plus production with probable partners), and increase production till 3 MMboe in 2019. Crude oil
production on graphic represents Pemex projections linked to the fields that has been assigned on Round Zero, plus additional
production resulting of future tenders in which Pemex decides to participate by itself or in alliance with other companies in order to
exploit new fields, as well as expected results of rounds where participate private companies.
3,5503,5603,540
3,670
3,7993,778
3,580
3,2153,143
3,006
2,850
2,6502,537
2,450
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000 Licitaciones(Rondas)Pemex +Asociaciones
Licitaciones (Rondas) 107 255 350 448 405 456 483 510 467 467 647 667
Pemex + Asociaciones 2,450 2,537 2,543 2,595 2,656 2,695 2,810 3,124 3,295 3,289 3,203 3,073 2,913 2,883
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Producción de petróleo crudo, escenario con reforma energética
(miles de barriles diarios)
Crude Oil Production. Scenario with implementation of Energy Reform
(thousand of barrels per day)
Exploration & Production Investment
During last years, Pemex Exploration & Production has increased investments in order to stabilize oil
production level, and reduce declination rate of its main reservoirs. Investment program has the objective
of increase proven reserves, enhance restitution rates and sustain production levels in the short and
medium term.
317
327
337
354358
363
377
362
346
337
350347
317 317
280
290
300
310
320
330
340
350
360
370
380
390
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Inversión requerida para la cartera de proyectos de PEP, 2015-2028
(miles de millones de pesos)
Source: Sener
Required investment for Pemex Exploration & Production portfolio, 2015-2028
(thousand million pesos)
Interested companies in Round 1
Companies Date Companies Date
ExxonMobil 19/09/2014 EOSYS 28/10/2014
Shell 23/10/2014 Statoil 19/11/2014
Chevron 01/10/2014 Tecpetrol S.A. 26/11/2014
Maerk Drilling 13/10/2014 Ecopetrol 03/12/2014
Energy Council of the Americas 10/11/2014 JOCMEG 10/11/2014
Hunt Oil Company 01/10/2014 Llog Exploration 21/11/2014
CGG Veritas Services 06/10/2014 Convex Oil & Gas AWE 12/11/2014
Petrofac México 07/10/2014 Geopark Argentina 06/11/2014
RPM(Reservior Production Management) 04/11/2014 Reforma Resources 10/12/2014
Halliburton 09/10/2014 Kimmeridge Energy 02/12/2014
Grupo Carso 13/10/2014 Maersk Oil 26/11/2014
Voyager Light Energy 21/11/2014 Petroleum Geo-Services 28/11/2014
Bridas Corporation 10/10/2014 Grupo Diavaz 09/12/2014
Dolphin Geophysical 17/10/2014 Anadarko Petroleum 05/12/2014
Nexen-CNOOC 06/11/2014 China Huarong Asset Management 09/12/2014
Llloyd’s Registrer 22/10/2014 Ikon Science 17/12/2014
IPD Latin American 22/10/2014 Petroservicios Industriales 09/01/2015
Sierra Oil & Gas 07/11/2014 DNB Bank ASA
13/01/2015
List of meetings, interviews and request of information about Round 1 in the National Hydrocarbons
Commission
Source: NHC
Crude Oil International Market
Source: International Energy Agency, december 2014
The International Energy Agency, has predicted that
prices will continue downward during first half 2015
due to oversupply and excess inventory that exist in
the international market.
The EIA has reviewed to the down the forecast of
crude oil prices (WTI) at 54.58 dollars per barrel in
2015 in current trend scenario, or planning, and 71
dollars in 2016. For Brent, the EIA expects an average
price of 57.58 dollars per barrel in 2015, and 75
dollars for 2016.
Source: Energy Information Administration – EIA -Energy Outlook,
January 2015.
Balance of demand, supply and inventory in the
world wide oil market
(MMbd)
Stock (inventory)
Demand
Supply
46.0
0
46.0
0
47.0
0
94.6
2
100.8
2
100.8
0
102.0
7
102.1
8
105.7
9
103.5
9
96.5
4
93.2
1
84.4
0
75.7
9
59.2
9
51.0
0
72.0
0
71.0
0
71.0
0
72.0
0
73.0
0
73.0
0
73.0
0
72.0
0
71.0
0
70.0
0
68.0
0
66.0
0
67.0
0
64.0
0
61.0
0
59.0
0
57.0
0
55.0
0
53.0
052.2
8
52.9
9
53.6
5
54.3
2
54.9
7
55.6
4
56.3
2
56.8
5
57.3
8
57.9
0
58.4
2
58.9
3
59.4
4
59.8
5
60.2
8
60.7
2
61.1
5
61.5
6
50.7
4
61.9
6
51.5
1
36.9
1
33.9
1
32.2
1
31.1
9
30.2
1
29.6
4
29.1
4
28.6
6
28.4
4
28.2
3
29.0
8
30.7
5
32.2
3
33.6
6
67.9
8
114.0
6
114.3
9
114.9
3
115.2
8
112.3
6
108.8
7
105.4
3
101.2
6
97.1
0
92.9
5
87.6
1
82.3
9
75.9
4
0
20
40
60
80
100
120
140
160
180
200
220
ene 2014 jun 2014 nov 2014 abr 2015 sep 2015 feb 2016 jul 2016 dic 2016
precio spotprecio de pronósticoNYMEX precio futuro95% NYMEX rango superior95% NYMEX rango inferior
Proyección del precio del petróleo West Texas Intermediate (WTI)
(dólares por barril)
Price projection of WTI
(dollars per barrel)
Price spot
Forecast price
Future price NYMEX
95% superior rank NYMEX
95% lower rank NYMEX
Pemex operates at competitive costs
Due to the decline in the international oil prices, and due to
the recognizing of international and national financial
institutions that the scenario for investments is
complicated, especially for shale and deep water projects,
Pemex can solve this challenge because it has advantages
on exploration and exploitation costs, allowing to the
company developing profitable projects, mainly in the
Round 1, in Shallow waters, where Pemex is a worldwide
leader.
17.22
17.1
14.35
13.16
12.35
12.19
11.48
9.24
8.51
7.91
0
0 2 4 6 8 10 12 14 16 18 20
Petrobras
Chevron
Shell
BP
Conoco
ENI
Exxon
Total
Statoil
Pemex
Comparativo internacional sobre costos de producción
USD 2013 / barril de petróleo
33.59
26.67
26.31
24.56
22.1
20.83
18.56
18.34
15.76
14.91
0 5 10 15 20 25 30 35 40
Petrobras
Chevron
Shell
BP
Conoco
ENI
Exxon
Total
Statoil
Pemex
Comparativo internacional sobre costos de exploración y desarrollo
USD 2013 / barril de petróleo
Pemex, the best operator in shallow waters
Competitive advantages
87% of reserves 1P are located in the Southeast Basin
Competitive costs structure (production cost 6.84/b USD;
exploration and develop cost13.77/b USD.
Infrastructure developed to exploit hydrocarbons reserves
and prospective resources
Vast knowledge of hydrocarbons reserves and
prospective resources in Mexico
Source: Agencias de noticias, Pemex
International comparative on production costs
(USD 2013 / per barrel)
International comparative on exploration & development
costs
(USD 2013 / per barrel)
The 2 Critical
Success Factors in
Mexico
1. Mexico is very promising,
but not an easy place to do
business.
Be patient, be present, find a
partner to become street
smart.
2. Mexico is short on capital.
This is a good time to find a
partner and invest wisely
for the long term. There is a
window of opportunity
before all the ‘seats’ are
taken.
Mexico is a
marathon not a
sprint!
Thanks for your
attention