POWER May 2010 - 92
POWER IN MEXICO
The Pervasive Influence of Hydrocarbons
Mexico's hydrocarbon sector is all-pervasive and permanently
intrudes on all areas of the Mexican economy, electricity
being no exception. PEMEX, the state-owned monopoly, is
one of the largest electricity users in the country and, following
reforms in PEMEX's structure in 2008, now has the
ability to cogenerate electricity (that is, be a partner in
owning power generation infrastructure) rather than being
tied to the CFE. PEMEX recently tendered a 300-MW cogeneration
plant, a bid won by Spanish giant Abengoa.
Both electricity generation and the oil and gas sector
are seen as key strategic areas by the state. The oil and
gas sector has traditionally provided the finances, while
the electricity sector was key to the development of the
country. The hydrocarbons sector has usually been extremely
profitable, and these resources were reinvested in
electricity generation, which was a net drain on PEMEX's
resources.
David Shields, editor of Energia y Debate, a local energyfocused
publication, explains that oil production in Mexico,
specifically at the Cantarell field, is currently going though
a period of decline. Cantarell production has fallen from
2.1 million barrels per day at the start of the decade to
772,000 in 2009.
Giovanni Aloi, director general of GE Energy Mexico predicts:
" My own belief is that oil and gas will rise in price in
the near future. The days of cheap petrol and gas are over.
We have to look to heavy deep sea oil, which is considerably
more expensive to extract. "
Thus, despite a potential rise in oil and gas prices, Mexico's
revenue will fall due to the lack of new fields coming
online (Figure 2). This drop in revenue will have profound
effects on the Mexican budget.
Juan Carlos Machorro of Santamarina y Steta, a law firm,
says: " It seems clear that from 2010 the government will
suffer from a lack of revenues due to a decline in oil exports.
There will be a big black hole in the Mexican budget
of 2010. "
What remains to be seen is how the government will be
able to commit the same level of investment to the electricity
sector in the future. Allowing more opportunities
for private sector involvement might be forced upon the
Mexico's future administrations.
2. Crude oil production (million barrels per day).
Source: PEMEX
3,383
2,906
2,608
775
mbd
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
92
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POWER May 2010
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