Mexico opens its territory to foreign fuel bidders | News | DW.DE | 11.08.2014

Mexico opens its territory to foreign fuel bidders

Mexico has opened its oil, gas and electricity industries to foreign and private companies. President Enrique Pena Nieto’s action follows congressional approval of the rules for production and profit-sharing contracts.

In the latest opportunity for the fossil fuel industry, President Enrique Pena Nieto said Mexico’s government would let foreign and private investors know by Wednesday which gas and oil fields they might snap up.

The Energy Ministry expects the first round of public tenders to be allotted next year. Officials in Mexico, the world’s 15th-biggest economy, hope to attract tens of billions of dollars in outside investment in deep-water oil drilling and shale gas production.

Mexico’s production peaked in 2004 at 3.4 million barrels daily. It now stands at 2.5 million barrels.

The reform ends a decades-long monopoly held by the national oil company, Pemex, and the electricity utility, CFE.

International fuel interests such as BP and Exxon Mobile had closely monitored the legislation’s passage and insiders expect that they will compete for the newly established development contracts and licenses.

‘Total remediation plan’

Regulators in Mexico’s north are monitoring for chemicals in the Sonora river and its tributary the Bacanuchi since an August 7 spill caused by heavy rains at the Buenavista copper mine at Cananea. The extraction site lies about 40 kilometers (25 miles) south of Mexico’s border with the United States.

Media reported that 40,000 cubic meters (10 million gallons) of wastewater turned the 420-kilometer Bacanuchi waterway orange, affecting 800,000 people. The PROFEPA environmental regulator blamed the company Buenavista del Cobre and ordered the neutralization of toxins, construction of dams to prevent further incidents, and an analysis of the water’s contamination level, among other measures.

“In addition to ordering the implementation of a total remediation plan, PROFEPA initiated proceedings against Buenavista del Cobre to determine possible sanctions,” the agency announced on its website.

According to Sonora state’s water agency, the affected towns include Arizpe, Banamichi, San Felipe de Jesus, Aconchi, Baviacora and Ures, as well as Hermosillo, the state capital, which derives a limited 3 percent of its fresh water from the river. Fish and livestock have died from the poisoned water.

Sonora is home to more than a quarter of Mexico’s mining industry. Companies regularly dig deep into the state’s geological surface structures to extract gold, copper, graphite and other metals and minerals.

via Mexico opens its territory to foreign fuel bidders | News | DW.DE | 11.08.2014.