In the past few years, Mexico has been changing rapidly. The second-largest economy in Latin America, Mexico has a stable political and business environment, access to global markets andvast natural oil and gas resources. In addition, recent legal reforms open the door for private investors to participate in sectors that previously were government monopolies.
These reforms, combined with a newly revamped energy sector, are creating huge openings for private investment and development in Mexican oil and gas. As a recent multi-billion dollar financing project shows, enticing opportunities may now be found throughout Mexico’s energy supply chain for those who know how to take advantage of them.
In a shifting energy industry paradigm, adaptability – not size – provides the key competitive edge
A contemporary “Jack and The Giant” tale has emerged within the oil and gas industry. A market once dominated by large operators has been encroached by smaller independents and competition is mounting. As global E&P spending continues to increase and companies set their sights on attractive areas to deploy capital, operators of all sizes will be forced to re-assess their business strategies if they want to secure an advantage.
Andrew Bateman | SunGard’s Energy Business
The recent announcement by the Environmental Protection Agency (EPA) that the U.S. will reduce CO2 emissions from coal generation by 30% from 2005 levels by the year 2030 is the latest in a number of policy and regulatory decisions that have and will continue to affect the energy supply and demand balance in the U.S.
Patrick Morris | HAGIN Investment Management
One of the many consequences of the 2008 financial crisis is the unprecedented intervention by the Fed and the Treasury resulting in historically low interest rates on government debt. By cutting interest rates to near zero, both the ECB and the Fed have created a huge pool of liquidity that has benefitted borrowers at the top of the food chain but has done little for smaller enterprises that now can only borrow at exceptionally high rates. The rates on small enterprise loans are now routinely in the mid-teens, with a range from 13 to 18 percent quite common. In addition to high interest, it is now commonplace for lenders to demand cashless warrants, royalties, and first position security interests. Even with these onerous terms, it is still difficult to access funds since most lenders are unwilling to lend below $25 million. In the energy sector, many are unwilling to consider anything below $50 million. Smaller lending entities have grown dramatically over the past three to five years and now find themselves competing for larger loans from a short list of potential borrowers. Oil and gas companies in the Niobrara, Permian Basin, Eagleford and Bakkan have been net beneficiaries, while many small and mid-sized conventional players have been left out in the cold.