HEADLINES: Will Mexico's President-Elect Get Along With US Oil, Gas?
The oil and gas industry continues to take a closer look at how the election of Andres Manuel Lopez Obrador as the new president of Mexico might affect the country’s energy reform, in particular, U.S. investment in its energy sector. Carlos Urzua, the choice for finance minister, said oil and gas contracts would be honored, with a caveat. “If it looks good, on we go.” It's a contract we have to respect, “that’s what he told Mexican television this week. Lopez Obrador’s pick for chief of staff, Alfonso Romo, has said the incoming administration does not expect the process of revision to reveal problems. Luis Gomar, a partner with Thompson & Knight, told Hart Energy’s Joe Markman he is heartened by the newly elected president’s softening of positions toward private industry late in the campaign. U.S. energy secretary Rick Perry said at the World Gas Conference in Washington, D.C. that a change of leadership in Mexico should not alter its basic relationship with the U.S.
Ryan Lance, CEO of ConocoPhillips, clarified comments he made at a conference in May when he told Ed Crooks of the Financial Times in a June interview that at his company’s redeploying of resources out of the Permian Basin would only be a temporary delay due to the pipeline bottlenecks in the region. According to the Financial Times report, Lance attracted attention last month when he said that his company was looking at redeploying resources out of the Permian Basin of Texas and New Mexico, the heart of the new U.S. oil boom. Lance told the Financial Times, ConocoPhillips had expected pipeline constraints to hit Permian production about a year from now but was surprised how fast they forced oil in the region to sell at a steep discount to benchmark U.S. crude.
Chevron has kicked off the sale of a number of its oil and gas fields in the North Sea as part of a review of its European operations. Chevron is the latest veteran North Sea producer seeking to scale back its presence in the 50-year-old basin, where production has been on a steady decline since the late 1990s. BP, Shell and ConocoPhillips have all sold assets in the North Sea in recent years.
Finally, President Trump continues to tweet demands to OPEC that it do something about high oil prices.His latest tweet on July 4th. ING said in a note “If Trump continues to believe that OPEC is not doing enough, we would not rule out a strategic petroleum reserve release from the U.S., or possibly even export restrictions on petroleum products.” Many industry analysts have pointed out that the threat of U.S. ban on Iran oil exports are a contributing factor to surging prices. All of this while oil traded near its three and a half year high on July 5th.