Market Overview

This sector includes the sub-sectors of Oil and Gas (OGM), Electric Power Systems (ELP), and Renewal Energy Equipment and Services. With the start of a new administration and the publication of the National Infrastructure Program 2007-2012, the mentioned sub-sectors have been identified to be a priority for Mexico’s Federal Government.  The demand for imported equipment and services for the energy sector increased by eight percent from 2006 to 2007.  U.S. exports to Mexico also have grown at an average of 8.5 percent during the same period.  The total market grew at an average of 5.0 percent annually from 2006 to 2007.  The competition will continue to come from Japanese, French, Chinese, Taiwanese, German, and Canadian companies.

Mexico’s Energy sector will continue to be a priority during the period 2007-2012, therefore, large budgets are expected to be assigned to each of the three major government agencies responsible for the maintenance and investment of energy infrastructure. Government Owned-Petroleum Company (PEMEX), the Federal Electricity Commission (CFE) and Luz y Fuerza del Centro (the federally owned Mexico City power company) have been authorized by the Mexican Congress a total budget of over USD35 billion during 2008.

Best Prospects

The best prospects for U.S. firms include: drilling of work-over-rigs, to be used in the exploration, discovery, development, maintenance, testing, depletion or production of oil and natural gas wells; pipe; valves; pumps; electrical apparatus for switching; insulated wire cable; electric capacitors, board panels; electric transformers; electric motors and generators; turbines, solar panels, electric poles, hydroelectric plants equipment, static converters; and rotary converters

Opportunities

In 2008 based in the National Infrastructure Program, Pemex, CFE and Luz y Fuerza contemplate to carry out throught domestic and international tenders for drilling of new wells in Cantarell, State of Campeche; Chicontepec, State of Veracruz; Burgos, (State of Tamualipas); Ku-Maloop Zaap, and the construction of more that 8,000 kilometers of oil and gas pipe lines, the modernization of the Salina Cruz Refinery; construction of the Manzanillo LNG plant; deep water exploration services contracts; mini-hydraulic projects in the South of Mexico; wind to energy projects and geothermal; etc. In 2008 Pemex plans to publish international tenders for 30 wells in the Cantarell area; 500 wells in the Chicontepec area; 300 in the Burgos area; 40 wells in the Ku-Maloob-Zaap area; a new marine terminal in Tuxpan (State of Veracruz); construction of 10 new plants for clean oil refined products, etc. With regards to CFE, international tenders are expected for La Yesca hydroelectric plant; La Parota Hydroelectric plant; Guadalajara I and II combined cycle power plants.

Mexico Infrastructure Projects: Oil and Gas

 The largest investment in Mexico’s NIP will be for the further development of Mexico’s capacity for oil and gas production. As a major source of revenue to the Mexican government, Petróleos Mexicanos (PEMEX), the state owned petroleum producer, expects to invest in exploration, refining, and production (basic petrochemicals, gas, and more complex petrochemicals). More than US$76 billion is earmarked for these projects and over half of the projects have planned start dates between 2008 and 2011.

  The major short term opportunities for U.S. companies in the oil and gas sector will be in providing drilling and exploration services to PEMEX. Because of the extensive activities of U.S. companies in the neighboring Gulf of Mexico, they should have a strong competitive advantage with respect to both technology and logistics. U.S. companies should thus be very competitive in supplying drilling platforms and services and especially with supplying services related to direct and enhanced oil recovery technologies. Likewise, U.S. companies excel in a number of areas that are critical to enhancing oil recovery, including technologies for drilling unconventional wells, technologies for secondary and EOR processes, and technology for monitoring, controlling and automation of wells and facilities.

  Mexico Infrastructure Projects: Electricity Sector

  Electricity infrastructure improvement projects, totaling US$35 billion will encompass generation, transmission, and distribution. Electricity generation will have the most resources devoted to it, encompassing over 60 percent of electrical infrastructure projects. Mexico’s strategy for electrical generation is to: expand the infrastructure for generation, transmission and distribution of electricity to meet expected increases in electricity demand; diversify electricity generation sources, emphasizing the use of renewable sources; increase electricity service coverage, particularly in rural areas; and improve public service quality regarding electricity supply.

    As with oil and gas production and processing, the primary opportunity for U.S. companies in the electrical generation sector will be providing equipment to Federal Electricity Comission (CFE) generation projects. However, to supplement its power generation CFE has turned to contracting out new electrical generation projects to private firms. These plants are operated under an independent power producer (IPP) contract, where the contractor is allowed not only to build the new plant but also to operate it for a period before the publicly owned firm takes control of plant operations. CFE would like to see more participation by U.S. companies and point to these projects as an opportunity for U.S. companies to increase their involvement in the electrical sector in Mexico.

Market Research

Renewable Energy

Renewable energy used for the generation of electricity, including mini-hydroelectric, biomass, photovoltaic-solar, wind power, and geothermal energies, has experienced slow growth in Mexico. But the market looks to be changing as the Mexican Government has recently proposed new renewable energy goals. The increasing level of pollution, higher costs of fossil fuels, difficulties in the reform of the state oil company, and heightened awareness of global warming have all led the government to press for the adoption of more clean energy sources.  To request the full text of this report please contact us.

Projected Investment for the Expansion of Mexican Gold Mine

The mine company, Goldcorp, announced that they would increase their investments from 882 to 1,490 million dollars in order to expand the Peñasquito gold mine project in the state of Zacatecas. This expansion will enable the company to process 130,000 tons of minerals daily, 30% more than the original project. Goldcorp hopes to initiate the operation, as well as the leaching in batteries, by the end of this year, according to their general manager, Kevin McArthur. He went on to say that the mine would be the largest mine in Mexico. In November of 2007, the company reviewed a feasibility study that details the extension of the operation of 130.000t/d. Peñasquito will begin leaching operations in batteries by the end of 2008, while the plant is being constructed. By 2009, they will be ready to expand to 65.000t/d, which will later increase to 100.000t/d. There will be an installation of a second line by 2011, to arrive at 130.000t/d. This expansion will entail more machinery, workers, and equipment. This is a good opportunity for US companies that sell machinery and accessories in this sector.  To request the full text of this report please contact us.

Iron and Steel Industry Recent Trends of the Mexican Steel Market for 2008

The steel industry in Mexico is undoubtedly an important one that has gone through several changes during the last two years. The consolidation of international groups that have purchased Mexican steel producers is expected to change the sector for the better, making the Mexican manufacturers more efficient and productive. Nevertheless, with the skyrocketing rise in steel prices around the world, this consolidation could prove less than beneficial to U.S. steel exporters. To request full text please contact us.

Overview of the Mexican Mining Industry, 2008

The mining industry in Mexico continues to be one of the most important productive, industrial sectors in the economy. This sector provides 1.6 % of the Mexican GDP, which in 2007 reached an amount of 9.5 billion dollars. Mexico now ranks 12 of 18 world wide in the production of the top minerals. It ranks number one and two in the world's production of silver and celestite (strontium) and is second in the world for fluorite and fourth in bismuth, arsenic and graphite production. The mining areas are scattered all over Mexico. Most of the large scale mining is "open pit" and the underground mines, especially those that mine gold, silver, and other precious materials, are basically owned and operated by very large mining conglomerates, and mostly based in Mexico City.

Foreign investment in the sector grew over 70% in 2007, reaching a figure of 2.2 billion dollars. With less than a quarter of the country's surface area surveyed, Mexico remains highly prospective.

The mining sector can be divided into four sub-sectors:

1. Mineral exploration and engineering services

2. Large scale mining machinery and equipment- open pit and underground

3. Mining safety equipment and communications

4. Environmental aspects

This report will provide a short overview of the business prospects for each sub sector.

Equipment for the Distribution,Transportation, and Storage of Petroleum Refined Products

This sub-sector market research report analyzes the market for equipment used for the distribution,transportation and storage of Petroleum refined products. This report includes information on the demandfor equipment needed for the distribution, transportation and storage of gasoline, diesel, and fuel oil products used by the automotive, industrial, and aviation sectors. This market is expected to grow approximately 12 percent from 2008 to 2009. This market has become more competitive, especially due to the efforts made by companies from Korea, China, Canada, Germany, and others.

The total market in 2007 for equipment used in the distribution, transportation and storage of refined products was USD1.7 billion. It is expected that the total market will increase to USD2.2 billion by the end of 2008. Mexico’s government owned petroleum company -Pemex considered the world’s ninth largest oil company and third biggest world crude oil producer, is the major end-user of equipment for this subsector. Pemex purchases of equipment and services are done through international and domestic tenders. To request full text please contact us.

 
Municipality lighting to operate with wind generator

The Mexican municipality of Santa Catarina, located next to the city of Monterrey, capital to the state of Nuevo Leon, in Northern Mexico, will become the first one to operate with wind energy. As of October 2008, Ecoenergy, a U.S. company specialized in wind-generation, will supply electricity to the city and will be in charge of the public lighting. Nine wind turbines will generate 22.5 megawatts and save USD 340,000 annually to the city. To request full text please contact us.

New Wind Energy Projects in Oaxaca

Six companies, Electricidad del Valle de México, Eoliatec del Istmo, Bii Nee Stipa Energía Eólica, Fuerza Eólica del Istmo, Eurus, part of Cemex and Parques Ecológicos de México, part of Iberdrola, have subscribed agreements with Comision Federal de Electricidad (CFE) to pay for the required transmission infrastructure to interconnect to the national grid. This first stage will generate 163 mW and progressively allow for 1,492 mW that should be ready by 2010. The investment could exceed USD 4,200 Million, all for wind energy generation. To request full text please contact us.

SEMPRA to build La Rumorosa 2 Wind Project

Baja Wind, a company subsidiary of Sempra Energy, EMETEC, a San Diego developer and the Ejido Cordillera Molina (ECM), located in La Rumorosa Sierra, between the municipalities of Mexicali, Tecate and Ensenada, all in the state of Baja California, signed a land-leasing contract for 30 years, whose purpose is the installation of a wind generation plant, with a capacity of up to 1,000 megaWatts (mW) and an investment in excess of USD 1 Billion.To request full text please contact us.

SEMPRA buys La Rumorosa Wind Project

SEMPRA Energy, through its subsidiary, SEMPRA Generation, agrees to buy the assets of Energia Eolica Rumorosa. The 250 mega-Watts (mW) project is valued at USD 400 Million. A development agreement, between SEMPRA Generation and Cannon Power, a San Diego, California consulting firm was formalized in early August, 2007. The project, due to start operating in the third quarter of 2010 will have 125 wind generators in the Mexican side of the Sierra de Juarez, approximately 50 km West of Mexicali, State of Baja California.To request full text please contact us.

Biofuels Law finally approved

On February 1, 2008, Mexico’s Secretaria de Energia (SENER – Ministry of Energy), published in the Diario Oficial (Official Gazzette), the Ley de Promocion y Desarrollo de los Bioenergeticos (Biofuels Promotion and Development Law), which deals with the promotion for the production of inputs for biofuels, starting with several raw materials; develops the production, trade and efficient use of biofuels; promotes the development of regional rural areas; promotes the reduction of greenhouse gas emissions and coordinates the relevant actions between the Federal, State, Federal District and Municipal governments. To request full text please contact us.

CFE Tenders Zona Manzanillo Transmission

Mexico's Comision Federal de Electricidad (CFE - Federal Electricity Commission), announced in the Diario Oficial (Official Gazette) dated December 27, 2007, an international public tender that includes two 230 kV and 115 kV sub-stations and three transmission lines with a total length of 103.6 km-circuit (km- C). The project is known as “212 SE 1202 Suministro de Energia a la Zona Manzanillo” and will be executed in the state of Colima, Mexico. To request full text please contact us.

CFE Tenders CC Norte Transmission Lines

Mexico's Comision Federal de Electricidad (CFE - Federal Electricity Commission), announced in the Diario Oficial (Official Gazette) dated December 27, 2007, an international public tender that includes two 230 kV sub-stations and two transmission lines with a total length of 85.4 km-circuit (km-C). The project is known as “155 LT Red de Transmision Asociada a la CC Norte” and will be executed in the state of Durango, Mexico. To request full text please contact us.

CFE Tenders Sonora Transmission Lines

Mexico's Comision Federal de Electricidad (CFE - Federal Electricity Commission), announced in the Diario Oficial (Official Gazette) dated December 11, 2007, an international public tender that includes a sub-stations and three transmission lines with a total length of 27.7 km-circuit (km-C) and one sub-station of 115 and 230 kV. The project is known as “201 SLT 1112 Transmision y Transformacion del Noroeste (Primera Fase)” and will be executed in the state of Sonora, Mexico. To request full text please contact us.

CFE Tenders Campeche Transmission Lines

Mexico's Comision Federal de Electricidad (CFE - Federal Electricity Commission), announced in the Diario Oficial (Official Gazette) dated December 20, 2007, an international public tender that includes a sub-stations and two transmission lines with a total length of 88.4 km-circuit (km-C). The project is known as “166 SLT 1002 Compensacion y Transmision Noreste-Sureste (Segunda Fase)” and will be executed in the state of Campeche, Mexico. To request full text report please contact us.

Equipment for the Exploration and Production of Natural Gas  

This sub-sector market research report analyzes the market for equipment used for the exploration and production of natural gas. This report includes information on the demand for equipment needed for the exploration and production as well as for the storage and distribution of natural gas that is used by Mexico’s industrial, electrical and residential sectors. This market is expected to grow approximately 10 percent from 2008 to 2009.  This market has become more competitive, especially due to the efforts made by companies from China, Canada, Brazil, Germany, Spain, and others.   

The total market in 2007 for equipment used in the exploration, production, storage and distribution of natural gas was USD3.2 billion.  It is expected that the total market will increase to USD3.4 billion by the end of 2008.  Mexico’s government owned petroleum company - Pemex - is the major end-user of equipment for this sub-sector.  Private companies purchase 45 percent of the equipment and services needed to implement Mexico’s natural gas programs and needs.

Equipment for the Distribution, Transportation, and Storage of Petroleum Refined Products

This sub-sector market research report analyzes the market for equipment used for the distribution, transportation and storage of Petroleum refined products. This report includes information on the demand for equipment needed for the distribution, transportation and storage of gasoline, diesel, and fuel oil products used by the automotive, industrial, and aviation sectors. This market is expected to grow approximately 12 percent from 2008 to 2009.  This market has become more competitive, especially due to the efforts made by companies from Korea, China, Canada, Germany, and others. 

The total market in 2007 for equipment used in the distribution, transportation and storage of refined products was USD1.7 billion.  It is expected that the total market will increase to USD2.2 billion by the end of 2008.  Mexico’s government owned petroleum company -Pemex considered the world’s ninth largest oil company and third biggest world crude oil producer, is the major end-user of equipment for this sub-sector.  Pemex purchases of equipment and services are done throughout international and domestic tenders. To request full text please contact us.

SORIANA to Build 120 MW Wind Generating Plant

Mexico’s Comision Reguladora de Energia (CRE) has granted to VIENTOS DEL ISTMO, S.A. DE C.V., A self-generation permit, number E/480/AUT/2005, for a wind-energy plant with a 120 mega-Watts (mW) capacity. The project calls for the construction of a 40 wind-generators plant, each turbine with a 3 mW capacity, originally scheduled to start operation in the second semester of 2009. VIENTOS DEL ISTMO is the special-purpose entity, formed by Tiendas Soriana, S.A. de C.V., to self-generate electricity for its 122 stores and associated businesses. The plant will be located in Cabo Santa Teresa, Municipality of San Dionisio del Mar, State of Oaxaca. The estimated investment is USD 300 million. To request full text please contact us.

CEMEX to Build 250 MW Wind Generating Plant

Mexico’s Comision Reguladora de Energia (CRE) has granted to EURUS, a self generation permit, number E/531/AUT/2006, for a wind-energy plant with a 250 mega Watts (mW) capacity. The project calls for a construction start in the third quarter of 2008 and generating operation by June 2010. EURUS is the special-purpose entity, formed by CEMEX Mexico, S.A. de C.V., Inmobiliaria Rio La Silla, S.A. de C.V., and TEG Energia,S.A. de C.V. The plant will be located in the Municipality of Juchitan de Zaragoza, State of Oaxaca. It will have 300 wind turbines of variable capacity, up to 3 mW each. To request full text please contact us.

SENER Plans Nuclear Capacity Increase

Mexico’s Secretaria de Energia (SENER – Ministry of Energy) is planning the required electricity generation capacity increase projected to the year 2026. The basis for this projection is the Total Generating capacity as of December 2005, then a 2014 projection and finally the 2026 required capacity.This exercise includes all technologies currently used, both fossil and renewable. Among the former, as in several other countries, nuclear energy is a sensitive theme due to the two risk components of radiation-safety and radioactive by-products disposal. To request full text please contact us.

Pemex Projects for 2007-2012- Burgos

Mexico’s Government Owned Petroleum Company (PEMEX- Petroleos Mexicanos) has indicated that the National Infrastructure Program for 2007-2012 calls for several international tenders during 2008 to invite companies to bid on projects located in the Burgos Area (includes the States of Tamaulipas, Nuevo Leon, and Coahuila). The total projects will be financed by PEMEX. The estimated budget for the projects that need to be implemented by 2012 varies from USD7.5 to 10.5 billion. The project includes among others: -drilling of  2,681 wells (2,331 development and 350 exploration); -7,400 Km of 3D seismic studies.  To request full text please contact us.

Pemex Projects for 2007-2012- Cantarell

Mexico’s Government Owned Petroleum Company (PEMEX- Petroleos Mexicanos) has indicated that the National Infrastructure Program for 2007-2012 calls for several international tenders during 2008 to invite companies to bid on projects located in the Cantarell (State of Campeche bay) area. The total projects will be financed by PEMEX. The estimated budget for the projects that need to be implemented by 2012 varies from USD11 to 14 billion. The project includes among others: - drilling of 98 wells; - construction of 3 marine structures; - 27,000 Km2 of 3D seismic studies; - construction of 84 kilometers of oil pipe lines.  To request full text please contact us.

 Pemex Projects for 2007-2012- Chicontepec

Mexico’s Government Owned Petroleum Company (PEMEX- Petroleos Mexicanos) has indicated that the National Infrastructure Program for 2007-2012 calls for several international tenders during 2008 to invite companies to bid on projects located in Chicontepec, State of Veracruz. The total projects will be financed by PEMEX. The estimated budget for the projects that need to be implemented by 2012 varies from USD10 to 14.5 billion. The project includes among others: -drilling of 5, 421 development wells.  To request full text please contact us.

Pemex Projects for 2007-2012- Ku-Maloob-Zaap 

Mexico’s Government Owned Petroleum Company (PEMEX- Petroleos Mexicanos) has indicated that the National Infrastructure Program for 2007-2012 calls for several international tenders during 2008 to invite companies to bid on projects located in the State of Campeche Bay- Ku-Maloob-Zaap. The total projects will be financed by PEMEX. The estimated budget for the projects that need to be implemented by 2012 varies from USD6.5 to 9 billion. The project includes among others: -drilling of 164 wells; -building of 18 platforms; -purchase of three storage tank ships, etc.  
To request full text please contact us.

Energy Tenders

Companies interested in participating on the following tenders should contact us:

1. PEMEX's Oil Platform Program

2. Manzanillo LNG Terminal

3. Multiple Service Contracts (MSCs) - Block Euro

4. Multiple Service Contracts (MSCs) - Block Monclova

5. Multiple Service Contracts (MSCs) - Block Nejo

Companies interested in participating on the following tenders should contact us:

1. PEMEX Coking Plants

2. Ethanol Production Startups

3. Luz y Fuerza (LyFC) Distributed Generation and Combined Cycle Projects

4. La Yesca Hydro Plant

5. Aqua Prieta II - Combined Cycle - Solar Power Plant

6. CCC Baja California Combined Cycle Power Plant

7. CCC Norte IPP Power Plant

Further Information, Comments or Questions

If you wish to write us regarding these reports, please contact Francisco Ceron, Trade Specialist on Energy Sector of the US Commercial Service Mexico City Office.