Recent News

What’s Up with Pemex Gas Stations in Houston?

While lots of folks are watching private branded gas stations open for the first time in Mexico, Pemex officials are carefully watching their very first Pemex branded gas stations in Texas. Five of the iconic Mexican gas stations opened in the Houston Texas area this past December. These were the first to open outside of Mexico in the company’s 80 year history.

The Houston stations sell United States gasoline, and though the attached convenience stores do include a Taco Shack, they also sell all-American style convenience-store-fare too.

Pemex intends these five stations as a market testing venture, primarily. Although they do plan to open more, you can bet a lot of what they’re doing is struggling to learn how to compete in the newly competitive Mexican market.

Private companies are only now opening non-Pemex branded filling stations. The Coca Cola bottling giant announced plans recently to rebrand some 300 Pemex stations under their own OXXO brand. OXXO is a 13,000 strong chain of convenience stores with locations all over Mexico. Gulf Oil also plans to open some 100 filling stations in Mexico before the end of this year.

All this comes in the wake of an 80-year monopoly on all things petroleum in Mexico, and that wake is not pretty. The former pride of Mexican industry is staggering under the weight of pension obligations from a very bulky workforce, and suffering from the collapse in world oil prices.

While Pemex has a run a Houston refinery, in Deer Park, for years, the Houston gas stations

Private Gas Stations Are Coming to Mexico

Pemex stations have been one the quintessential signs you crossed into Mexico for decades. There’s simply been no other brand of gasoline visible anywhere in the country. That’s all about to change. In just the past month, the ban has been lifted and private brands of gasoline are allowed to return to the Mexican market.

Private investors can open all new gas stations, or partner in with existing franchisees, many of which are leased directly from Pemex. Pemex has held a total monopoly on the petroleum industry for nearly 80 years, and these changes are only happening at the result of fairly sweeping energy reforms passed by the current administration between 2012 and 2014.

With about 12,000 gas stations in Mexico, it’s a good opportunity and lots of consumers are none to loyal to the Pemex brand. And possibly more interesting still, in June of this year, gasoline vendors will finally be able to import gasoline and diesel fuels.

Keen interest in the Mexican retail gasoline market has come from Femsa, the big Coca Cola bottler that already operates some 13,000 OXXO convenience stores all over the country. They’ve already announced plans to convert some 200 to 300 existing Pemex stations to OXXO branded filling stations.

Some of the more common complaints from Pemex customers are with poor service and over-charging for gas. The Mexican consumer protection agency has launched multiple complaints with franchise owners.

Gulf Oil LP is the first non-Mexican company to announce plans to enter the market and though they aren’t likely

A Brief Fascinating History of Pemex and the Mexican Petroleum Industry

The history of Petroleos Mexicanos, the Mexican state-owned oil and petroleum monopoly, needs to be understood with its beginnings during the complicated, protracted and very long Mexican Revolution. Most history books will try to set the dates of the revolutionary war between roughly 1910 and 1920, but the long period from 1920 until 1940 is also considered a phase of the revolution in which many of the many of the unsettled disputes and disagreements of the earlier war flared, and re-flared into both hot and cold conflicts. That’s a 30-year period to consider, and aspects of it still confound scholars and historians who argue over its significance even to this day.

Oil and gas resources were nationalized and, for all intents and purposes, made the property of the Mexican state with the Constitution of 1917. As this was still very much the hot part of the revolution, it took many years afterward to consolidate and implement the laws established in that constitution. As increasing numbers of oil and gas companies from foreign countries were exploiting these resources – indeed, foreign companies were the only ones exploiting them – conflicts led to ever more involvement by the still shaky Mexican government.

As these conflicts continually took the form of labor strikes, and interruptions to services that the now young Republic was relying on by 1938 they became simply intolerable. President Lázaro Cárdenas came down hard on behalf of workers striking, now against nearly all foreign-based oil companies. Article 27 of the Constitution of

Pemex Shipping Crude Oil to South Korea

Pemex, the Mexican oil and gas giant is shipping crude oil to South Korea. January 2016 exports were up 11% over the previous month despite the lowest production levels since August of last year. All of this is happening in atmosphere of increased, maybe incredible, scrutiny, as Pemex struggles to adapt to low world oil prices, skyrocketing pension obligations and a very rocky road to reform.


Crude oil exports to South Korea began last year as part of Pemex’s diversification into other international markets. Those sales have continued throughout the past year, most of them going to Hyundai Oilbank Co. Ltd., with about a fifth going to GS Caltex Singapore Pte. Much of this diversification effort was made in anticipation of sliding oil prices provoked by the boom in U.S. shale gas which heavily affected the Gulf market where Pemex has been slowly losing dominance.


In 2014 Pemex exported an average of about 100,000 barrels a day to all of Asia. January of 2015 saw exports of 211,000 barrels a day to Asia, but that volume has continued to climb intermittently. Exports to Europe have also increased. January 2015 saw about 275,000 barrels a day bound for Europe.


Total exports this past January though, have been much higher, at about 1.12 million barrels per day to all destinations. Importantly, much of this crude is leaving from Salina Cruz Maritime Terminal and refinery on the Pacific coast, and not from the Gulf as had been the case with previous shipments. Asia shipments were scheduled

In the Pipeline: More Cross-border Gas

As Mexican and US trade increases, an increasing number of cross-border natural gas pipelines are being built, and exports are way up. All of these pipelines, and there are more than 20 in operation now, are regulated by the Federal Energy Regulatory Commission (FERC) which is part of the US Federal Department of Energy. They also review and authorize all of the US’s liquefied natural gas terminals, and interstate pipelines within the United States.

In general, these pipelines have proceeded through the qualification process without much controversy. There are rising murmurings about the extent to which low priced natural gas is actually delaying the development of cleaner and renewable energy sources but at this writing the controversy is considered minimal.

US-Mexico pipelines doubled their capacity in less than the past ten years. About 4.9 billion cubic feet of natural gas could be moved per day, in export to Mexico (at capacity). And that capacity will likely double again by the end of 2016. Though some 60 private companies have had proposed pipeline projects approved, again, by and large they’ve met little resistance in the regulatory process.

Transnational oil pipelines are another story. A bit more colorful history routes crude oil through the U.S. Department of State and Presidential permitting. The recent Keystone XL pipeline controversy is likely to color similar projects for years to come. Although, the US does, again, export a very limited amount of crude oil after years of federally enforced prohibition, a trickle has been seen meeting the high hurdle

Mexico and the US: Energy Partners?

Mexico is one of the US’s biggest trading partners, all the way around. The two cultures live almost entirely independently of one another (in Mexico, the relationship is characterized sometimes as like “brothers with their backs to each other”), and yet trade, in oil and gas, and in many, many other things is more important to both sides than ever before in history.

It’s not only a trade issue, but sometimes a political issue too. Cooperative geothermal energy projects that straddle the border have been in the works for almost 40 years. And the geothermal electricity is used on both sides of the border, though not everyone knows it. Joint projects in all kind of other renewable energy sources come up and require serious policy consideration – again, on both sides of the border.

Presidents Obama and Calderón signed a little-known (outside the industry) Bilateral Framework on Clean Energy and Climate Change in 2009 with the intent of further developing clean and renewable energy sources and combatting climate change. The framework set goals for strengthening the transnational electricity grid and for further developing green energy in both markets. Some of those projects will also be cooperative. Further taking advantage of oil and gas deposits that lie on or across borders also needs to be done in a way that protects environments again, on both sides.

Cities along the border are driving demand as they are some of the fastest growing in both countries. Both countries are also working to reduce greenhouse gases and

Pemex: What to Watch for in 2016

Some of the 153,000 employees of Mexico’s state petroleum interest will be looking for new jobs in 2016. Hoping to closer match up with some of the international firms now competing to profit from remaining Mexican oil resources, Pemex announced in December that job cuts in 2016 would be a part of the ongoing changes at all levels of the petroleum stream. Pemex has also been partnering with private companies and opening bidding on exploration, and construction projects to firms beyond the nation’s borders.

Falling international oil prices have left the petroleum monopoly with the lowest budget it’s had since 2007 and the process of “farming out” more contracts is well under way. 2016 will see the first ground-breakings on many of these projects.

Production of the company’s premier product is also expected to the lowest in a quarter century as Pemex continues to struggle to re-organize in the wake of accidents, lower yields on existing wells, and as already mentioned, a glut in global supply that’s left prices hovering below US$40 a barrel.

One of the biggest downstream contracts awarded went to the engineering unit at South Korean firm, Samsung Group. Their US$550m contract is for extensive engineering for the second phase of the Antonio M. Amor Refinery in Salamanca, Mexico. This is also one of the most closely watched of the private contracts being awarded, in part because refineries history and stature. The contract calls for an expansion of the plant capacity by some 53,000 barrels and it’s to be completed

Mexico Refinery Upgrades to Continue in 2016

After fits and starts and multiple cancellations of plans, Pemex has issued an investment plan worth some US$23 billion for much needed upgrades to Mexico’s aging oil refineries. The new plan replaces much more ambitious plans that had been released prior to the worst fiscal year in a quarter century for the former Mexican state oil monopoly.

The new investment plan was announced in December nearly simultaneously with announcements of job cuts that are also to be part of the 2016 Pemex budget. The oil giant has been struggling to bring its workforce down from the nearly 153,000 employees to a level closer to the numbers of similar private companies in the world market.

Pemex and the energy regulatory agency of the Mexican government had previously outlined goals for increasing refinement capacity as well as for upgrading its capacity for producing cleaner burning fuels.

The current proposals are something of a refinement to earlier and more expensive projects, the contracts for some of which had already been granted. Among the most notable was a two-phase upgrade project to the Salamanca Refinery, both parts of which were awarded to South Korean firm Samsung.

Many similar projects were actually cancelled or seriously revised prior to opening to bidding. This was in part due to lower global oil prices, but also in response to several expensive accidents that dampened the company’s near-term prospects. Total budget cuts were some $4 billion prior to budgetary 2015, which necessitated the disappointing revisions to plans.

The newer projects include a US$5 billion

Refinery Spotlight: Salina Cruz Refinery

As Pemex Contracts increasingly go to international and private energy firms, it’s worth taking another look at Mexico’s existing energy infrastructure. Refining capacity remains one of the key areas for investment and recent years have seen some very important moves toward increasing Mexico’s overall capacity. The Mexican government, and Pemex have also signaled an intent to go ahead with cleaner, and low-sulfur fuels and for overall reduced emissions of greenhouse gases.

Over the past year, one of the most important refitting and upgrade projects was at the Salina Cruz refinery on the Pacific coast. In operation since only the 1980s, the plant has produced about 290,000 barrels of Gasoline, middle distillates and fuel oil products per day.  Current plans call for a total investment of about ten billion pesos, more than US$600 million, and for extending the current pipeline capacity in the surrounding state of Oaxaca. This project is also to include 22 tugboats to better serve the port of Salina Cruz with towing, maintenance and emergency operations.

The refinery upgrades are Pemex’s plans for more diesel fuel production which is part of an investment of US$2.8 billion at Salina Cruz and four other refineries. The fuel quality portion of the upgrade is intended to lower Mexico’s greenhouse gas emissions by some twelve thousand tons per year while increasing refined fuel output by 139,000 barrels per day across Mexico. The refinery upgrade includes work on four diesel hydro desulfurization units, hydrogen production units and sulfur recovery. Upgrades are being made at the

Three of 2015’s Biggest Pemex Contracts

Pemex Standards in English took on new importance as a variety of international bidders took on Pemex at auction this past year. Though bidding got off to a rocky start in July, with only two of 14 blocks actually sold, by September, Pemex seemed to have gotten some of the kinks worked out of their new auctioning procedure and sales were much more up to expectations.

July’s two blocks were purchased by a new Mexico City company called Sierra Oil and Gas, one of the only bidders willing to put up with the too-short lead time and basic lack of geological information on offer in July. Still, as the fields have already been discovered, the lack of risk is just one more incentive.

Come September, Pemex – and presumably the powers that be in the Mexican government – had come up with adequate information for the auction take place in a more transparent process, with enough time to actually look things over and information about the lowest acceptable bids that the government would consider. September bidding was widely considered a much more successful sale. Nine of fourteen pre-qualified bidders actually made nods towards the available fields, all off the coasts of the states of Campeche and Tabasco.

Among the biggest buyers were the Italian group, Eni, marking their first entry into the Mexico marketplace. Eni offered 83.75 percent back to Pemex for access to the Amoca, Mizton and Tecoalli fields, all shallow water fields. At just about 21 square miles, the fields are

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