As Ukraine ushers through tax legislation designed to prop up political-business elite and alienate outside investors, Mexico finally passes secondary legislation to implement sweeping oil sector reforms and open up the sector to foreign investors.
On 6 August, the Mexican Senate voted 90-27 to pass the delayed secondary rules that will make energy sector reform a reality and end the 76-year state monopoly on oil and gas held by Pemex.
Now Mexico is looking at a possible $1 trillion in outside investment, which at the end of the day could significantly reshape the oil and gas picture in North America.
At the same time, Ukraine moved on 1 August to ensure that new foreign investment is crippled by a tax code that doubles tax rates for private gas producers and benefits certain local political-business elite at the expense of the state and the need to develop more resources, as Oilprice.com reported yesterday.
Meanwhile, Reuters reports that wars, unrest, sabotage and sanctions are keeping some 3.3 million barrels of oil per day out of the market. This represents 4% of global supply, with the intensifying conflict in Iraq and the enduring chaos in Libya promising more “offline” oil.
Amid the conflict and chaos, however, exports of crude oil from the US in June reached their highest level since the 1950s, putting the US ahead of Ecuador, the smallest member of OPEC. Exports spiked 35% from May to 389,000 barrels per day in June—most of it heading to the Canadian market, media cited the US Census Bureau as saying on 6 August. The figures reflect allowable shipments of US crude oil to Canada and re-exports of foreign oil; however, we could soon seem more light-processed crude, or condensate, added to the export mix as companies find loopholes to get around the ban on crude oil exports.
With the good news in Mexico and stellar US production figures, attention is now turning—or returning—to the Gulf of Mexico, where advances in drilling technology are being put to use offshore, in the shallow waters. There has been a lot of news this week about squeezing more out of the older fields of the Gulf of Mexico, piggy-backing on advances in onshore drilling technology that have resulted in the shale boom.
The Gulf of Mexico advance—which essentially means moving the fracking boom offshore--is being led by Apache Corp for the most part, with the goal of tapping mature fields and unlocking hidden reserves.
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By. James Stafford of Oilprice.com
