137 MEXICAN.pdf
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STEP O N E First Reading an d Listening * Understanding t h e Major Message f Q Instructions: Read th e article an d listen to the tape at the same time. Do not bother with th e words you do not know. Try to & understand only th e major message. Then go to STE P TWO and find in our list what yo u think that message is . Mexican Energy Sector Seeks Private Investors Funds a re badly needed fo r o i l exploration Former DuPont Executive Leads Change a t State-Owned Pemex MEXICO CITY jjj A s DuPont Co.'s t o p executive i n Mexico, Raul Munoz championed a greater role for the private sector i n Mexico's hydrocarbon industry, t h e lone province of tie jMte since 1938. I n 1995, when DuPont's Conoco Inc. unit pushed for a contract to de^jjftthe giant Burgos natural-gas field along th e Texas border, M r . Munoz lobbied actively for the plan. Like others, Conoco's proposal failed t o clear t h e considerable political hurdles t o outside participation in th e energy, | jg js| r No|*f|i4iliie4 : o M a fc petroleum giant Putruleos Mexicanns, or J|n|gx|Mr. Munoz is again pushing, a l - beit getliyjfj : JMbfe|;privale enterprise. Big oil compa- nies stuck a foot in the door of Mexico's cash-starved energy sector last week when the Royal Dutch/Shell Group a n d E l Paso Corp. said they would invest $300 that ^§ i tp j i i i ' i r a 8 as back into gas. port, dislrilm ••_• a nd store natural ga s here since 1995, th e deal whlp§ .... (pjjtires a long-term commitment from Pemex to buy the gas j j is being taken as an important signal o f Mexico's concession that it can't meet its en- ergy needs alone. "It's a bold step," says Shell Gas & Power director J o n C'hadwiek. "Meispf rjeqgnizes it needs to dreeipfjf 4tf , supply." Indeed, M r. Muno/ w a s forceful o n that point last week, saying Mexico risks a sharp decline i n petroleum exports if it doesn't com mit sonic $ 9 billion a year to new explo- ration j a leve| mfaflyfkjpf If ,t^?gplM|te2 |yihej : fqr^|r. ! adjainistration o f Ernesto Zedillo. I n a sense, the Shell/Hi Paso terminal represents more o f th e same in that Pemex is deepening its commitment to import fuels rather than investing to produce them a t home. But the deal is important because it should help attract for- eign investment in another area: electricity generation. The inability o f private utilities to see where their fuel will come from h a s hampered Mexican efforts to attract private power producers. Last week, l o r instance, th e state power com- pany received just one bid tor construction of a 450-mega- watt power plant. A t t h e same time, a wave of gas arriving on t h e Gulf Coast aboard Shell tankers should help northern Mexico reduce it s reliance on the volatile spot: market for gas in South Texas, where pric e run-ups last year forced Mexico's state electricity company to abandon gas in favor o f fuel oi l While Mexico doesn't face a California-like energy crunch soon, officials s e e blackouts b y 2004 if it doesn't aggressively expand i t s power grid. Shell, through its InterGen power unit, has its sights set on that business, too. Both it and El Paso already generate electricity in Mexico. Beyond cranking u p energy imports, M r. Munoz said th e company will have to look a t extensive service eon- tracts f or drilling g a s contracts akin to the one he tried to push on Conoco's behalf in 1995. Earlier this year, Canada's Precision Drilling Corp. won a $270 million contract to drill 240 gas wells fo r Pcrncx in the Burgos Basin. for now, such contracts involve flat fees, b u t private com- panies a re agitating fo r deals that would ti e payment to performance an idea some in Pemex tavor. Such contracts could b e allowed b y overturning a 1959 la w prompted b y oil-industry labor unions; a change would be possible without changing Mexico's constitution. I n theory, says M r. M unoz. the more private investment Pemex can a tt r a t ^i^| ^s ^^ | a i ^Q ^d | ^^ | ^^ and distribution, the more the world's No.7 oil company will have to invest in its core activity: crude o il productfa^. That means more oil available for export to Mexico's t o p customer, the U.S.
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Transcript of 137 MEXICAN.pdf
7/28/2019 137 MEXICAN.pdf
http://slidepdf.com/reader/full/137-mexicanpdf 1/1
STEP ONE First Reading andListening * Understanding the Major Message
fQ Instructions: Read the article and listen to the tape at the same
time. Do not bother with the words you do not know. Try to
&understand only the major message. Then go to STEP TWO andfind in our list what you think that message is.
Mexican Energy Sector Seeks Private InvestorsFunds are badly needed for oil exploration
Former DuPont Executive Leads Change at State-Owned Pemex
M E X I C O C I T Y jjj A s D u P o n t Co.'s t o p e x e c u t i v e i n
M e x i c o , R a u l M u n o z c h a m p i o n e d a grea ter ro l e for the
p r i v a t e sector in Me x i c o ' s h y d ro c a rb o n i n d u s t ry , th e l o n ep r o v i n c e of tiejMte since 1938.
In 1995, when Du P o n t ' s Co n o c o I n c . u n i t p u sh e d for a
con t rac t to de^jjftthe giant Burgos natural -gas f ield a l o n g
th e T e x a s border , M r. M u n o z lobbied a c t i v e l y for the p l a n .
L i k e o t h e r s , C o n o c o ' s p r o p o s a l f a i l e d t o c l e a r t h e
c o n s i d e r a b l e p o l i t i c a l h u r d l e s to o u t s i d e p a r t i c i p a t i o n i n
the e n e r g y ,jj!|jg!!!js|r
No|*f|i4iliie4:oM
afc p e t r o l e u m g i a n t P u t r u l e o s
M e x i c a n n s , o r J|n|gx|Mr. M u n o z is a g a i n p u s h i n g , a l -
bei t getliyjfj:JMbfe|;privale en terpr i se . B i g o i l c o m p a -
n i e s stuck a foo t in the door o f M e x i c o ' s c a s h - s t a rv e d
e n e rg y s e c t o r l a s t w e e k w h e n t h e R o y a l D u t c h / S h e l l
G r o u p a n d E l P a s o Corp . s a id they wou ld inves t $300
that §itpj2piii'i8tra
8as
back into gas.
por t , d is l r i lm • • _ • and store n a t u r a l ga s h ere since 1995, th e
d e a l whlp§ . . . . (pjjtires a l o n g - t e rm c o m m i t m e n t f ro m
Pemex to buy the gas jj i s be ing t aken as an i m p o r t a n t
s i g n a l o f M e x i c o ' s concess ion tha t i t c a n ' t meet i ts en-
ergy n e e d s a l o n e .
"It's a bo ld step," says She l l G a s & P o w e r d i r e c t o r Jo n
C ' h a d w i e k . "Meispf rjeqgnizes it n eed s to dreeipfjf 4tf ,supp ly . "
I n d e e d , M r. M u n o / wa s fo rce fu l o n tha t po in t l as t week ,
s a y i n g M e x i c o r i s k s a s h a r p d e c l i n e in p e t ro l e u m e x p o r ts
if i t d o e s n ' t c o m m i t sonic $9 b i l l i o n a year to new exp lo -
r a t ion ja leve|mfaf lyfkjpf If,t ?gplM|te2|yihej:fqr^|r. !
adjainist ra t ion o f Ernes to Zed i l lo .
I n a sense, the She l l /H i Paso term ina l represents more o f
th e same in t ha t P e m e x is d e e p e n i n g i t s c o m m i t m e n t t o
impor t fue l s r a t h e r t h a n i n v e s t i n g to p ro d u c e t h e m a t h o m e .
But the dea l is i m p o r t a n t because it s h o u l d h e l p a t t r ac t for-
e ign i nves tm en t in a n o th e r a rea : e lec t r i c i ty g e n e r a t i o n . T h e
i n a b i l i t y of p r i v a t e u t i l i t i es to see w h e r e t h e i r fu e l w i l l c o mefrom h a s h a m p e re d M e x i c a n efforts to at t ract private power
p r o d u c e r s . L a s t w e e k , lo r i n s t a n c e , th e state power com-p a n y received just one bid tor construct ion of a 450-mega-
wat t power p l a n t .
At th e s a m e t i m e , a w a v e of gas a r r iv ing on th e G u l f
C o a s t a b o a rd S h e l l t a n k e r s s h o u l d h e l p n o r t h e rn M e x i c o
r e d u c e it s r e l i a n c e on the v o l a t i l e spot: m a r k e t for gas in
S o u t h Texas, where p r ic e run-ups last year fo rced Mexico ' s
s tate electr ic i ty company to abandon gas in f a v o r o f f u e l
oi l
W h i l e M e x i c o d o e s n ' t f ace a C a l i f o r n i a - l i k e e n e r g y
c r u n c h soon , o f f i c i a l s se e b l a c k o u t s b y 2004 if it d o e sn ' t
a g g r e s s i v e l y e x p a n d i t s p o w e r g r i d . S h e l l , t h r o u g h i t s
I n t e r G e n p o w e r u n i t , has i ts sights set on tha t bus iness ,
too. Both i t and E l Paso a l ready genera te e lec t r i c i ty in
M e x i c o .
B e y o n d c r a n k i n g up energy imports, M r. Munoz said
th e c o mp a n y wil l have to look a t extensive service e o n -
t rac t s fo r d r i l l i n g g a s con t rac t s a k i n t o the one he tried
to push on Conoco's b e h a l f i n 1 9 9 5. E a r l i e r th is y ea r ,C a n a d a ' s P re c i s i o n D r i l l i n g C o rp . w o n a $270 m i l l i o n
con t rac t to dr i l l 240 gas w e l l s fo r P c r n c x in the Burgos
B a s i n .
for now, such contracts involve fla t fees, but private com-
panies a re agi tat ing fo r dea ls tha t wou ld ti e p a y m e n t top e r f o r m a n c e a n idea some in P e m e x tavor.
Such contracts could be a l l o w e d by o v e r t u r n i n g a 1959
l a w p ro m p t e d b y o i l - i n d u s t r y l a b o r u n i o n s ; a c h a n g e w o u l d
be possib le w i t h o u t changing Mexico 's const i tu t ion.
I n theory , s ays M r. M unoz . the m ore pr iva t e inves tmen t
P e m e x canattraqt i | sp |ai Q d|~ |d ^
a n d d i s t r i b u t i o n , the more the w o r ld ' s No . 7 o i l c o m p a n y
w i l l h a v e to invest in i ts core ac t iv i ty : c ru d e o i l pro d u c t f a^ .
T h a t m e a n s m o r e o i l ava i l a b le fo r expor t to M e x i c o ' s to p
cus tomer , the U.S .
