Mexico to invite oil and gas investment

Troubled waters: An oil rig in the Gulf of Mexico. (Shutterstock)
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Updated 13 March 2020

Mexico to invite oil and gas investment

  • Under President Andres Manuel Lopez Obrador, Mexico has pursued a more statist approach to the energy sector and suspended auctions of oil fields

ACAPULCO: Mexico will soon invite private firms to invest in oil and gas projects to help a flagging economy hit by the fallout of coronavirus, Finance Minister Arturo Herrera said on Wednesday, but cautioned energy auctions were not on the cards for now.

Herrera said a long-awaited energy plan will be unveiled soon that will detail where and how much private firms can invest.

“It’s not just a general outline, we’re going to tell them this project here, here and here, this amount and size is open to investment,” Herrera said in an interview on the sidelines of a banking conference in Acapulco.

Under President Andres Manuel Lopez Obrador, Mexico has pursued a more statist approach to the energy sector and suspended auctions of oil fields.

Lopez Obrador said last week that the energy plan could be unveiled in March, after weeks of delays. The balance of public and private investment the plan will aim for has not been clear because of differences of opinion in the cabinet over energy policy.

Also last week, Mexico’s private sector presented the government with a broad package of proposed energy investments worth almost $92 billion. Herrera’s comments suggest at least some of those proposals could be adopted.

Some members of the government believe attracting more private capital is vital for lifting growth and that restarting auctions would send a strong message to investors that Mexico is open for business.

But Herrera said that even auctions for joint venture projects with state oil company Petroleos Mexicanos (Pemex) were not viable, after a rout in oil markets this week caused by a drop in fuel demand from the coronavirus outbreak and the collapse of a production cutting deal between major producers.

He said that he did not “think it makes sense considering where oil prices are.”

Prices fell again on Thursday amid a broader market drop after the US restricted travel from Europe following a declaration that the coronavirus outbreak is now a pandemic.

Layla Vargas, director of energy consultancy Muvoil Consulting, said that while some oil companies may view Herrera’s invitation with skepticism in the current economic climate, the right terms could attract them.

“What the country needs right now is investment,” Vargas said.

G20 trade ministers highlight importance of transparency in current environment

Saudi Arabia has introduced several security and economic measures in its fight against coronavirus. (SPA)
Updated 31 March 2020

G20 trade ministers highlight importance of transparency in current environment

  • Extraordinary video conference explores ways to tackle coronavirus disruptions

RIYADH: Trade and investment ministers from the Group of 20 major economies convened an extraordinary video conference on Monday to come to grips with the blow to global trade from the coronavirus pandemic and weigh how to overcome supply chain disruptions.

They voiced concern about the daunting challenges facing workers and businesses, particularly the most vulnerable ones.
“We will ensure our collective response is supportive of micro, small and medium-sized enterprises, and recognize the importance of strengthening international investment,” said a ministerial statement.
It added: “We are profoundly saddened by the devastating human tragedy caused by the spread of COVID-19. The pandemic is a global challenge and requires a coordinated global response.”
The statement added that G20 leaders, following their extraordinary meeting conducted on March 26, committed “to presenting a united front against this common threat.”
“Now more than ever is the time for the international community to step up cooperation and coordination to protect human life and lay the foundations for a strong economic recovery and a sustainable, balanced, and inclusive growth after this crisis,” the ministerial statement added.
The ministers also said they had started monitoring and assessing the impact of the pandemic on trade as per the task entrusted to us by G20 leaders.
“We are actively working to ensure the continued flow of vital medical supplies and equipment, critical agricultural products, and other essential goods and services across borders, for supporting the health of our citizens. Consistent with national requirements, we will take immediate necessary measures to facilitate trade in those essential goods,” the statement added.
“We will support the availability and accessibility of essential medical supplies and pharmaceuticals at affordable prices, on an equitable basis, where they are most needed, and as quickly as possible, including by encouraging additional production through incentives and targeted investment, according to national circumstances. We will guard against profiteering and unjustified price increases,” the ministers said.
“We are concerned about the impact of COVID-19 on vulnerable developing and least developed countries, and notably in Africa and small island states.
“We agree that emergency measures designed to tackle COVID-19, if deemed necessary, must be targeted, proportionate, transparent, and temporary, and that they do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules.
“We will implement those measures upholding the principle of international solidarity, considering the evolving needs of other countries for emergency supplies and humanitarian assistance.
“We emphasize the importance of transparency in the current environment and our commitment to notify the WTO of any trade related measures taken, all of which will enable global supply chains to continue to function in this crisis, while expediting the recovery that will follow.
“As we fight the pandemic both individually and collectively and seek to mitigate its impacts on international trade and investment, we will continue to work together to deliver a free, fair, non- discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open,” the statement added.
“We will ensure smooth and continued operation of the logistics networks that serve as the backbone of global supply chains. We will explore ways for logistics networks via air, sea and land freight to remain open, as well as ways to facilitate essential movement of health personnel and businesspeople across borders, without undermining the efforts to prevent the spread of the virus.
“We will continue monitoring and assessing the impact of the pandemic on trade. We call on the international organizations to provide an in-depth analysis of the impact of COVID-19 on world trade, investment and global value chains,” the ministers said.
We will continue working with them to establish coordinated approaches and collect and share good practices to facilitate flows of essential goods and services.
We will convene again as necessary, and we task the G20 Trade and Investment Working Group to address these issues closely and to identify additional proposed actions that could help alleviate the wide-range impact of COVID-19, as well as longer-term actions that should be taken to support the multilateral trading system and expedite economic recovery.
The next Italian G20 2021 Presidency is committed to continue paying the highest attention to the international trade climate in the discussion of long-term actions.