Wrap – Week Ended 12/6/13

Wrap comments will be included in the Monday post. 

wrap 120613

7 Responses to “Wrap – Week Ended 12/6/13”

  1. 1
    zman Says:

    Other day in happy smiley Iran where some things never change


    My favorite part is the secondary headline:

    Development of sophisticated centrifuges could enable it to refine uranium faster, but does not appear to contravene Geneva agreement.

    Note also that they began installing them last week. 

  2. 2
    milepost_43 Says:

    Mexico…maybe a change in "wind direction"..worth adding a GOOG alert…

    Mexico Joint Energy Proposal to Break $95 Billion Monopoly

    By Adam Williams, Nacha Cattan and Ben Bain – Dec 7, 2013

    Senators from Mexico’s two biggest political parties proposed a bill to break the nation’s 75-year oil monopoly by amending the constitution to allow production sharing contracts and licenses for outside producers.

    The joint legislation would allow private companies such as Exxon Mobil Corp. (XOM) to develop fields in the largest unexplored crude area after the Arctic Circle as state-owned Petroleos Mexicanos seeks to reverse eight years of falling output. The bill would allow companies to log crude reserves for accounting purposes, which may make it easier to secure project financing.

    The bill comes after four months of political wrangling following the release of separate plans from President Enrique Pena Nieto’s ruling Institutional Revolutionary Party, or PRI, and the opposition National Action Party, known as the PAN. The government says an energy overhaul would lift economic growth 1 percentage point by 2018 and reverse oil production losses.

    “It’s a 180-degree turn for Mexico,” George Baker, a Houston-based energy consultant, said in a telephone interview. “I never thought they would do that.”

    Pena Nieto has called the legislation the cornerstone of his administration.

    Senators from the two parties, which with congressional allies have the two-thirds majority needed to pass the bill, are seeking to amend the nation’s charter to allow private and foreign oil companies to pump crude in Mexico’s $95 billion energy industry for the first time in more than seven decades.

    Crude Reserves

    Similar to the concession model proposed by PAN, licenses would grant broader operational control than the govenment’s initial profit-sharing model and allow companies to manage oil directly. In production-sharing contracts, companies can register crude reserves as assets for accounting purposes, the bill says. The oil remains state property until it is pumped.

    The bill also calls for the creation of a sovereign fund, originally proposed by PAN, that would be used to manage oil profits for long-term investment and savings. The sovereign fund will be a public trust that will be operated by Mexico’s Central Bank, which will act as trustee, and receive all the earnings derived from contracts.

    “The PRI has accepted almost all of the PAN proposals,” PAN Senator Salvador Vega said. “Many of the proposals contained in our original initiative have been included, though there are some things that could be added to advance it.”

    Licenses will be used principally for shale-gas exploration, according to PAN Senator Jorge Luis Lavalle. Mexico has shale-gas resources of as much as 460 trillion cubic feet, according to data compiled by state oil company Pemex.

    While Jorge Luis Preciado, the PAN’s leader in the Senate, says that licenses aren’t the same as concessions, Baker said the models are very similar.

    Senate committees are scheduled to begin debating the bill tomorrow. The Democratic Revolution Party, the third-biggest party in the Senate, opposes the constitutional amendments.

  3. 3
    tomdavis12 Says:

    Market weakness in energy names was due to some comments Papa made that the golden age of oil is over. Was in WSJ on Friday. I do not have the link but will look for. If anyone gets before I do. please post. 

  4. 4
    zman Says:


  5. 5
    life’s-a-gas Says:

    Mark Papa, executive chairman of EOG Resources Inc., one of the largest U.S. crude producers, says the fat profit margins that energy producers raked in earlier this year are over. "It was kind of like found money and it wasn't going to last," he says.



  6. 6
    mimster90 Says:

    Those links not working for me. I search google on 'U.S. Oil Prices Fall Sharply as Glut Forms on Gulf Coast'


    Which brought up several links to the full article.


  7. 7
    zman Says:

    re 6 – yeah, thanks, that's actually how I found it too. Really didn't have much in there from Papa. I suppose if people want to attribute Friday's dip to him and Goldman they can but that's an over reaction in my view. Nothing he said would be news to those in the sector. 

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