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NEWS LETTER

ACCESS TO ENERGY is a multidisciplinary corporate service shelter integrated by

committed professionals that collaborate contributing knowledge and experience to

provide comprehensive tailored solutions which facilitate the opening and operations

of our clients in Mexico.

The firm provides all kinds of essential services for every stage of a company’s life

cycle: feasibility analysis, soft landing opening, operation, logistics, and attached

services required for a successful corporate strategy.

Number 18

EDITION AND PRODUCTION: ACCESS TO ENERGY CONTACT: news@accesstoenergy.mx

www.accesstoenergy.mx Page 2 to 15

News from international Energy sector.

News Letter May 2017.

• GASOLINE THIEVES MAKE BILLIONS EACH YEAR. (The

News)

• IN BLOW TO TRUMP, GE BACKS NAFTA AND

VOICES SUPPORT FOR MEXICO. (Reuters)

• OIL PRICES BOUNCE HIGHER AS MINISTERS

PROMISE CRUDE CUTS UNTIL 2018. (The Telegraph)

• MEXICO ANNOUNCES SCHEDULE FOR THIRD

POWER AUCTION. (Revista Eólica y del Vehículo

Eléctrico)

• EXXON SAYS TO OPEN GAS STATIONS IN MEXICO,

INVEST $300 MILLION. (Reuters)

• TRACKING CLEAN ENERGY PROGRESS.

(International Energy Agency)

• SOLAR STREET LIGHTING COMES TO MEXICO'S

ZAPOPAN. (BNamericas)

• DEPUTIES OF THE ENERGY COMMISSION TOUR

PEMEX FACILITIES IN CAMPECHE AND TABASCO.

(Pemex)

• BP SEES EARLY PROMISE, GROWING INVESTMENT

IN MEXICO ENERGY. (Reuters)

• DEEPWATER RENAISSANCE? HOPES RUN HIGH FOR

MEXICO PROSPECTS. (Journal of Petroleum

Technology)

• ISTHMUS OF TEHUANTEPEC WIND ENERGY

PROJECT WILL BE LARGEST IN LATIN AMERICA.

(Revista Eólica y del Vehículo Eléctrico)

• PRESIDENT ENRIQUE PEÑA NIETO, ON DOMESTIC

INNOVATION AND GLOBAL ECONOMIC TRENDS.

(Oxford Business Group)

• GLENCORE AGREES JV DEAL TO SUPPLY MEXICAN

FUEL STATIONS. (Reuters)

• MEXICO'S CFE ACCUSED OF DELAYING SOLAR

INSTALLATIONS. (BNamericas) (

GASOLINE THIEVES MAKE BILLIONS EACH YEAR.

According to the “Current Situation and

Perspectives on Oil Theft in Mexico 2016” report,

organized crime profits estimated at 21 billion pesos

($1.2 billion) per year from gasoline theft. Each liter

of gasoline is sold for about 4 to 5 pesos to retailers

and 10 to 11 pesos to the average person and

each barrel contains 74 liters of gasoline. The report

was made by the Etellekt Security Risk Analysis Unit.

The report says that the Zeta Cartel obtains more

than 7 billion pesos per year for their sale of the

stolen fuel, while the Jalisco New Generation Cartel

(CJNG) receives a little over 4 billion pesos per year.

Mexican cartels are responsible for 94 percent of

the raids on Petróleos Mexicanos’ (Pemex) pipeline

network, leaving 5.05 percent to smaller gangs,

many of them composed of people from places

close to the pipelines, like Puebla.

The Zeta cartel, which can be found in the states of

Puebla, Guanajuato and Tabasco, accounts for 78

percent of the illegal raids.

www.thenews.mx

www.accesstoenergy.mx Page 3 to 15

IN BLOW TO TRUMP, GE BACKS NAFTA AND VOICES SUPPORT FOR

MEXICO.

General Electric (GE.N) on Friday praised Mexico as a big part of its future

and said the company is "very supportive" of the North American Free Trade

Agreement (NAFTA) that U.S President Donald Trump has threatened to

ditch.

GE Chief Executive Officer Jeff Immelt said on a visit that Mexico had great

potential and was not properly understood. He touted the conglomerate's

Mexican operations and the trade deal binding Mexico, Canada and the

United States.

"GE as a company, we're very supportive of NAFTA," Immelt told employees at an event to mark the expansion

of operations in the northern city of Monterrey. He said the trade accord could be modernized, as Mexico has

argued.

Immelt sits on a Trump-appointed manufacturing council that Mexico has targeted for lobbying as Mexico and

Canada push U.S. business leaders to defend NAFTA.

The GE boss said trade meant "win-win" opportunities across North America.

"We will continue to work constructively in the context of wanting to see a close relationship between the U.S.

and Mexico," he said, noting that GE's exports to the rest of the world from Mexico were worth $3 billion.

"We're optimistic about Mexico, we're optimistic about what we can do here," Immelt added, saying Latin

America's no. 2 economy would be a "big part" of GE's future.

Earlier this month, Immelt urged the Trump administration to avoid protectionist policies, calling on it to level the

playing field for U.S. companies with tax reform, revived export financing and improved trade agreements.

Trump touts a "Buy American" policy and has railed against U.S. companies moving operations to Mexico. He

has threatened to ditch NAFTA, a lynchpin of the Mexican economy, if he cannot rework it to secure better

terms for the United States.

Unlike some U.S. companies, GE has not backed off plans in Mexico, risking broadsides from Trump on Twitter.

Earlier, the Mexican presidency said in a statement that GE had stated an interest in doubling purchases from

Mexican suppliers next year. Immelt did not mention this.

Vladimiro de la Mora, CEO for Mexico, said the figure came from an announcement last year and did not mean

GE aimed to double purchases between this year and 2018.

On Thursday, GE said it had won a contract to provide plants producing two new gigawatts of power in Mexico

and secured a separate $120 million, multi-year service deal.

De la Mora said GE could not yet reveal details of the 2 GW deal, but it was "likely" the value of the total

investment in the power plants would exceed $500 million.

http://www.reuters.com/article/us-usa-trade-mexico-ge-idUSKBN18829I

www.accesstoenergy.mx Page 4 to 15

OIL PRICES BOUNCE HIGHER AS MINISTERS PROMISE CRUDE CUTS

UNTIL 2018.

Oil prices have bounded higher after oil ministers from Saudi Arabia and

Russia said that the joint deal to cut crude production from the global

market would be extended into next year.

The ministers offered markets the clearest sign yet that a meeting between

the world’s largest oil producers later this month will deliver a renewed

pledge to tackle the oversupply of oil by cutting down on production.

The oil price climbed to $52 a barrel from under $49 a week ago after Saudi Energy Minister Khalid al-Falih and

his Russian counterpart Alexander Novak said in Beijing that the joint deal would be extended from the middle

of this year until the end of March 2018.

Industry commentator Malcolm Graham Wood said the warm words could drive oil prices higher still, but would

need to be supported by a binding agreement towards the end of this month if the gains are to be sustained.

“Little confirmation on the detail of the agreement has yet been announced but if this is a genuine agreement

then I would expect the price to rise more as these two heavyweights will carry the rest of the group with them,”

he said.

“Having said that, the usual large dose of cynicism will undoubtedly exist and proof of the pudding will be

demanded by the market."

The first six month deal to cut global production by 1.8m barrels per day was agreed last November between

members of the Organisation of Petroleum Exporting Countries and major producers outside of the cartel,

including Russia.

The agreement was the first of its kind in around eight years and spurred a 25pc rally in crude prices in the weeks

that followed. However, concern that the deal may not go far enough to tackle the glut of oil still dragging on

the market caused prices to tumble back below $50 a barrel in recent weeks.

Since then Opec ministers have issued a flurry of supportive statements to assure the market that a deal is likely

to come from the May 25 meeting. The extension will initially be on the same volume terms as before, although

the ministers said they hoped other producers would join the efforts.

In a joint statement Opec’s de facto leader Saudi Arabia and Russia, the world’s second largest oil producer,

said they had come to the conclusion that the agreement needs to be extended.

"The two ministers agreed to do whatever it takes to achieve the desired goal of stabilising the market and

reducing commercial oil inventories to their five-year average level,” the statement said.

The rally in oil prices has propelled European shares higher, with a particular boost for FTSE-listed oil companies.

Shares in Tullow Oil climbed by over 3.3pc to 201.63p while Cairn Energy rose 2.75pc to 201.63p.

Premier Oil was the biggest oil company climber after it revealed better than expected trading update as its

two-year financial restructuring draws to a close.

Equity analysts at Barclays said Premier’s update “is littered with clear evidence of progress”.

“While its drawn-out debt refinancing has distracted the market, the company has been able to focus on

delivery. Production is running ahead of guidance, costs are running under budget and signs of upside to the

www.accesstoenergy.mx Page 5 to 15

Catcher [North Sea] project are noteworthy highlights, while the refinancing is moving to a successful

conclusion,” the analysts said.

http://www.telegraph.co.uk/business/2017/05/15/oil-prices-bounce-higher-ministers-promise-crude-cuts-2018/

MEXICO ANNOUNCES SCHEDULE FOR THIRD POWER AUCTION.

Mexico has published a call for bids for the country’s third electrical power

auction aimed at attracting new investment in renewables.

The winners will sign long-term power purchase agreements (PPAs) for

clean energy supply, the energy secretariat SENER and the state energy

control centre CENACE said in a joint statement. Public and private

companies and the state will take part, as in the previous two auctions,

they added.

Unlike in last year’s auctions however, it will be possible to sell power to participants other than state-owned

utility Comisión Federal de Electricidad (CFE). This will proceed through a clearing house, that will act as the

counterpart in the contracts signed between the buyers and the winning sellers, the statement said.

SENER will publish an operational handbook, which is currently undergoing a process of public consultation

organised by state regulators, about how the clearing house will function.

More information about the auction is due to be published this week, including the characteristics of the bid

round and the contract models.

It is not yet clear whether the upcoming auction will take into account the differing costs of electricity

generation across the country, as with the second auction.

Bids submitted to CFE will be published on July 31, while those made to other participants will follow on August

14. Technical bids will follow in September. The results of the auction are scheduled to be announced at the

end of November, the statement added, and projects must commence generating by January 2020.

Following the early stages of energy market reform, Mexico’s first auction saw a total of 1,720 MW of capacity

awarded. Seven major wind and solar firms won 15-year contracts for large-scale projects, including SunPower

Systems Mexico, Enel Green Power and JinkoSolar.

The second power auction resulted in a further 8.9 TWh of renewable supply contracts awarded, of which 4.8

TWh were for solar and 3.9 TWh for wind power projects.

The country is ramping up efforts to attract investment in renewables to meet its government-level targets,

diversifying its energy mix as well as reducing its reliance on fossil fuels.

By 2024, the country intends to source 35% of electricity generation from renewables. Under its Energy Transition

Law, by 2050, half of all electricity generated in the Latin American nation will have to come from renewables.

https://www.evwind.es/2017/05/11/mexico-announces-schedule-for-third-power-auction/59780

www.accesstoenergy.mx Page 6 to 15

EXXON SAYS TO OPEN GAS STATIONS IN MEXICO, INVEST $300

MILLION.

Exxon Mobil Corp announced it will bring its Mobil-brand gas stations to

Mexico, pumping $300 million in the coming decade as it seeks to gain a

foothold in the country's retail fuel market.

Exxon expects to open its first service stations in Mexico later this year and

will offer motorists its Synergy gasoline and diesel fuels, the U.S.-based oil

company said in a statement on Wednesday.

The company did not specify how many service stations it would open in Mexico or where it would source the

fuel for them. But local newspaper Reforma reported on Wednesday that Exxon company official Martin Proske

said in an interview that supply options included importing fuel via train or boat or buying gasoline from state-

owned Pemex.

The plan follows BP Plc's announcement earlier this year that the British oil giant would open about 1,500 service

stations in Mexico within five years.

BP told Reuters on Wednesday that its foray into Mexico is proving more promising than expected, and that it

would likely increase its investment in everything from exploration to retail fuel sales.

Separately, Mexican media reported Royal Dutch Shell said it would also open its first gas station in the country

this year, citing the firm's downstream chief for Mexico, Andres Cavallari. Shell did not immediately reply to

requests for comment.

Latin America's No. 2 economy is home to about 11,400 gas stations and is the world's fourth biggest gasoline

market, Mexico's energy minister has said.

For decades, Mexico's fuel market was closed - by law - to any company but Pemex. But in 2013, reforms ended

Pemex's monopoly in everything from crude oil production to retail sales.

"Recent energy reforms present a unique opportunity to help meet the growing demand for reliable fuel supplies

and quality service in Mexico," Exxon's Proske said in a company statement.

Fears had grown in Mexico that foreign investment might fall after U.S. President Donald Trump was elected last

year, as he railed against companies that moved operations to Mexico.

U.S.-Mexico relations have also been strained by Trump's threat to ditch the North American Free Trade

Agreement and his promise to build a wall between the two countries.

But Exxon's announcement was the latest good news for Mexico's economy after General Electric Co last week

praised the country as vital to its growth and Siemens later said that it was going to swap out U.S. imports for

local supplies at its Mexican plants.

However, growing fuel theft has worried some in the energy sector. Mexican authorities have been struggling

to contain criminal gangs siphoning off fuel that Pemex has said is costing it some 27,000 barrels per day in

gasoline and diesel.

http://www.reuters.com/article/us-exxon-mobil-mexico-idUSKCN18D1XR

www.accesstoenergy.mx Page 7 to 15

TRACKING CLEAN ENERGY PROGRESS.

Each year, the IEA’s Tracking Clean Energy Progress (TCEP) report

examines developments across a range of clean energy sectors and

technologies. The TCEP uses benchmarks for 2025 as modelled in Energy

Technology Perspectives 2017, as well as the milestones identified in the IEA

Technology Roadmaps. Measuring against these benchmarks provides an

assessment of whether technologies, energy savings and emissions

reduction measures are on track to achieve the longer-term emissions objectives by 2060.

The report evaluates whether a technology or sector is on track, needs further improvement, or is not on track

to meet these targets. Trends are assessed with reference to technology penetration, market creation and

technology development. Questions used to evaluate progress include: What is the current rate of technology

deployment? What share of the overall energy mix does the technology represent? What mechanisms are in

place to enable and encourage technology deployment, including government policies and regulations?

What is the level of private-sector involvement in technology progress through deployment?

In 2016, 3 of the 26 tracked technologies were on track towards a sustainable energy transition: onshore wind

and solar, electric vehicles, and energy storage. While these technologies represent only a small share of the

total energy system, they are rapidly scaling up and continue to strengthen their position as mainstream energy

solutions. Meanwhile eight technologies are significantly off-track, requiring renewed policy focus. Only three

of these “off-track” technologies saw significant (and promising) improvements over the past year.

Overcoming the barriers to further progress across many of these sectors and technologies will require, in

particular, a robust scaling-up of public and private clean energy RD&D investment. This year’s special feature

addresses the scarcity of existing information about current public and private investment patterns, and offers

suggestions for improvement going forward.

https://www.iea.org/newsroom/news/2017/may/tracking-clean-energy-progress.html

SOLAR STREET LIGHTING COMES TO MEXICO'S ZAPOPAN.

Mexican firms Power Iluminare and Fortius Electromecánica have formed

a JV to supply public lighting to the city of Zapopan from the latter's Jalisco

I solar plant (pictured), which opened in April, on an 18-year contract.

The contract is worth US$239mn and will include the installation,

maintenance and operation of more than 70,000 streetlights in Zapopan,

a city of 1.2mn people adjacent to Jalisco state capital Guadalajara,

according to a press release.

Fortius' Jalisco I 8MW solar plant will be expanded to 16MW in a second phase, and eventually supply 32,000

low-income houses in Jalisco, according to a company presentation. The plant, located in Zacoalco, comprises

25,000 solar panels and was built on a dry lake bed to mitigate its environmental impact on the land.

https://subscriber.bnamericas.com/en/interviews/electricpower/alejo-lopez-nextracker-/?position=2052743

www.accesstoenergy.mx Page 8 to 15

DEPUTIES OF THE ENERGY COMMISSION TOUR PEMEX FACILITIES IN CAMPECHE AND TABASCO.

Legislators of the House of Representatives’ Energy Commission from various parties went on a working tour of

several Petróleos Mexicanos facilities in the states of Campeche and Tabasco, with the purpose of learning

about of the company’s operations in marine areas, which provide over 80% of total oil production.

For two days, the group of deputies, led by the president of the Energy Commission, Georgina Trujillo, toured

the drilling platform A/E Yunuen in the Campeche Sound, which has been fitted with state-of-the-art technology

that has allowed for the reduction of well drilling time by 60 percent. They also visited the Zaap C processing

center of the integrated asset Ku Maloob Zaap, the highest oil production field in the country.

As a part of the working tour, they also visited the FPSO Yúum K’ak’Náab (Lord of the Sea in Mayan), which

executes hydrocarbon separation and blending processes. It has a storage capacity of 2.2 million oil barrels

and separates around 200 thousand barrels of oil and gas each day. This vessel, one of the largest in the world,

also loads export crude oil to other oil tanker ships from different countries, at a rate of 1.2 million barrels per

day.

Afterwards, the group reached the Pemex Dos Bocas maritime terminal, in Tabasco, which is considered a

strategic shipping and export center of crude oil from the Campeche Sound and the Coast of Tabasco, and

which also receives oil product imports.

During the tours, they were given an explanation of the systems and safety protocols applied in all oil production

facilities.

http://www.pemex.com/en/press_room/press_releases/Paginas/2017-043-national.aspx

BP SEES EARLY PROMISE, GROWING INVESTMENT IN MEXICO ENERGY.

BP Plc's first foray into Mexico's recently opened energy market is proving

more promising than expected, and the government should offer more big

projects to lure investment, the British oil major's Mexico boss said in an

interview.

Chris Sladen, country manager for Mexico, said BP expects to increase

investment in everything from exploration to retail fuel sales, and looks

forward to partnering with state oil company Pemex [PEMX.UL] after losing

an early chance for a lucrative tie-up.

Mexico wants to attract major investors to reverse years of declining crude output and rising dependence on

U.S. natural gas and fuel imports.

"To turn that ship around, you need a substantial number of large projects," Sladen said at BP headquarters in

Mexico City on Tuesday. "I would encourage Mexico to offer substantial numbers of large projects because

that's what it takes."

BP and others are expanding their presence in Mexico after a 2013 energy overhaul ended Pemex's decades-

long monopoly.

The British firm is already involved in three offshore projects, two in the Gulf of Mexico's deep waters and another

in shallow waters. Sladen said initial company investment in all three could total many hundreds of millions of

dollars.

That investment would grow significantly, he added, if the projects are successful.

www.accesstoenergy.mx Page 9 to 15

In 2015, Argentina-based Pan American Energy LLC [BPPAE.UL], which is 60 percent BP-owned, won the rights

to develop the Hokchi field in the Gulf's shallow waters.

Sladen said three of four committed exploration and appraisal wells have already been drilled there, and early

data is promising.

"The initial results have suggested that the reservoir volume might be slightly higher than initially modeled.

Perhaps it's 20 percent higher," he said.

During the auction for the Hokchi field, Mexico's oil regulator estimated that the 15 square mile (40 sq km) area

contained 334 million barrels in remaining oil resources.

At current prices for Mexico's crude exports at around $46 per barrel, a 20 percent larger reservoir volume would

mean more than $3 billion in additional value from nearly 67 million additional barrels.

Sladen said that data from the Hokchi wells is still being analyzed, and while the drilling program should be

completed later this year, investment decisions are still "some months away."

Late last year, BP partnered with Norway's Statoil [STLBR.UL] and France's Total SA to win development rights for

two deep water blocks in the southern Gulf of Mexico's Salina basin.

Exploration plans for each of the blocks will be submitted to regulators by September, Sladen said.

While each of the three companies in the consortium has a one-third stake in both blocks, Statoil is the operator,

responsible for development.

BP has maintained a presence in Latin America's second-biggest economy dating back to the 1960s, and

Sladen has been country manager since 2007.

The company narrowly lost out in December to Australian mining and oil giant BHP Billiton in its bid to partner

with Pemex on its Trion deep water project, but Sladen still expects to tie up with Mexico's former oil monopoly.

"I see a future of us co-investing with Pemex on major projects," he said, without going into further detail.

BP is still evaluating a range of projects at oil auctions scheduled for later this year, as well as possible investments

in ports or storage facilities needed to import fuel, he added.

The company has created hundreds of local jobs with hundreds more likely in the near future as it cements its

status as Mexico's first-ever integrated international oil firm, he said.

Beyond the three offshore projects, BP has recently won so-called open season rights to surplus capacity on

some natural gas pipelines owned by Pemex, Sladen noted.

The company also launched Mexico's first foreign-branded gas station, with plans to open some 1,500 stations

over five years. Sladen said that by the end of this year BP could open 200 gas stations.

The first station, which opened in March just outside Mexico City, has already become one of the country's top

three retail sellers by volume, he added.

There are about 11,400 gas stations in Mexico.

http://www.reuters.com/article/us-bp-mexico-idUSKCN18D0IZ

www.accesstoenergy.mx Page 10 to 15

DEEPWATER RENAISSANCE? HOPES RUN HIGH FOR MEXICO PROSPECTS.

Can Mexico be the catalyst that will lead a deepwater renaissance for the oil and gas industry? Six panelists at

a 4 May session at the Offshore Technology Conference in Houston gave a very positive, hopeful view of the

potential for deepwater growth there and—as a best case—a renaissance. The panelists are all directly

involved with the expanding international opportunities in the Mexican upstream sector.

“There is a big opportunity sign pointing toward Mexico; Mexico is open for business,” said Helge Haldorsen,

director general of Statoil Mexico and former 2015 SPE president. He described Mexico’s 2013 energy reform as

“a tremendous initiative and a bold vision” and said the country’s four bid rounds for license acreage “have all

been transparent” with more rounds to come.

The industry needs to push deepwater development costs down to about USD 50/bbl to attract capital,

Haldorsen said. To do so will require the actions of multiple parties—operators, the political administration,

regulators, the treasury department, service companies, and suppliers. “It takes a village,” Haldorsen said, “only

together can we get the breakeven down to that level.”

While there are 3,000 deepwater production wells and extensive infrastructure in the United States Gulf of

Mexico (GOM), Mexico has only 57 and little nearby infrastructure. An indication of the drilling opportunity in

this under-explored acreage is the almost 30 billion BOE of recoverable resources estimated by Pemex to lie

within Mexico’s deepwater prospects, Haldorsen said.

Mexico produced 2.6 million B/D of oil in 2015 and somewhat less than that last year. Haldorsen noted that the

International Energy Agency (IEA) has estimated that production could rise to 3.4 million B/D by 2040, assuming

the energy reform is sustained, but would lag at 2.3 million B/D in that year without the reform.

NEEDED: 20 WILDCATS PER YEAR.

To reach the higher level will require approximately 20 wildcat wells per year, an activity level that Norway and

the US have achieved in the past, Haldorsen said. He estimated that Mexico will need as much as USD 30 billion

of annual investment to so.

Haldorsen recommended that Mexico lower the government royalty level, at least during the price downturn,

to stimulate drilling activity. With initial royalties not payable until 2025, their net present value is significantly less

than face value. By stimulating more near-term finding and development work, additional treasury revenue

could be generated and flow sooner, he said, and successful drilling activity would build upon itself. The same

rigs could work in the US and Mexico GOM, which could achieve some economies, he added.

Stan Franklin, general manager of frontier exploration and appraisal for Europe, Africa, and Australia at

Chevron, said his company is “very, very excited” about Mexico and “pleased with the way things are going”

under the reform.

SCORECARD FOR MEXICO’S DEEP WATER.

Franklin evaluated the country’s deepwater opportunities by presenting a “scorecard” consisting of six points:

a proven petroleum system, attractive acreage and predrill bid rounds, a stable fiscal and regulatory regime,

3D seismic data, well and impact discoveries, and infrastructure.

He gave strong ratings to the petroleum system, acreage attractiveness and bid rounds, and the available 3D

seismic, while noting that the fiscal and regulatory process is “continually improving.” However, he noted the

very limited deepwater infrastructure and said that Mexico needs “a couple of major discoveries” that will drive

infrastructure development and stimulate smaller surrounding projects. Franklin gave Mexico 3½ points out of

six.

www.accesstoenergy.mx Page 11 to 15

Lorna Campbell, vice president of exploration at ExxonMobil, called Mexico “a shining star” in the industry and

said, “We all really want to see Mexico succeed.”

USD 200 BILLION OF INVESTMENT.

According to the IEA, Mexico potentially could produce an additional 900,000 B/D of deepwater oil by 2040.

Campbell said the discoveries to enable this largely need to occur by 2025 and that up to USD 200 billion of

investment will be required.

ExxonMobil, with Total as operator, won the right to explore Perdido Block 2, the deepest block in Mexico’s

recent inaugural deepwater bid round. “We see this as one of the most technically challenging blocks in the

Mexican deepwater,” Campbell said. Water depths range from 7,546 ft to 11,811 ft, and at 1,158 sq miles, the

block covers as much area as approximately 120 US GOM blocks.

Mexico is uniquely positioned globally, Campbell said, because of its proximity to the US and Canada, their

markets, experienced personnel, technology, and infrastructure.

ABUNDANT 3D SEISMIC DATA.

Ulises Hernandez, vice president of geosciences and technical assurance at Pemex E&P, discussed Pemex’s

contribution to the understanding of Mexico’s deepwater acreage and the future of the country’s deep water.

Pemex has acquired 3D seismic data on 65% of Mexico’s prospective deepwater acreage, including wide-

azimuth seismic in the northern areas, and for deep water in total has more than 38,600 sq miles of 3D seismic

data and a comparable amount of 2D seismic, he said.

In the past 6 years, the company has drilled 65 deepwater exploration wells, including 30 in ultradeepwater,

and six deepwater development wells, Hernandez said. The exploratory drilling has achieved a 42% success

rate and discovered approximately 3 billion BOE of new resources. “Mexico has the potential to drive the next

deepwater wave,” he said.

INCREASE EFFICIENCY.

Felipe Arbelaez, regional president for Latin America at BP, stressed the need for a continued increase in

deepwater project efficiency. “The lower-cost basins will take, over time, a larger market share,” and this means

that Mexico’s authorities and the companies involved must work together to ensure competitiveness, he said.

Arbelaez noted the progress made through energy reform but added, “There’s totally room to go in terms of

standardizing and making it comparative with the way we operate in other places around the world.” He also

emphasized the need for government incentives for bringing in new technology, such as from the US GOM.

Explaining why BP has invested in Mexico deepwater acreage, Arbelaez said, “We’ve seen all the data. It’s an

under-explored area, which is absolutely essential. We certainly have identified some particularly interesting

leads.”

Adam Seitchik, general manager of exploration and new ventures for the US and Mexico at Murphy Oil, pointed

out that Mexico’s deepwater acreage is complementary to that in the US GOM where the company has been

active for years. He called the Mexico GOM a perfect location for Murphy.

“It all comes down to that world-class source rock,” Seitchik said. Coming into a new venture that has a proven

source, “you’re well above and well ahead of any other high-end basins around the world,” he said. “I’m

ecstatic.”

https://www.spe.org/en/jpt/jpt-article-detail/?art=2964

www.accesstoenergy.mx Page 12 to 15

ISTHMUS OF TEHUANTEPEC WIND ENERGY PROJECT WILL BE LARGEST

IN LATIN AMERICA.

Oaxaca has announced a US $1.2-billion investment in a wind farm by the

Japanese conglomerate Mitsubishi Group that will provide a 65-million-

peso (US $3.4-million) windfall for the municipality of Juchitán.

Eólica del Sur, or “southern wind power,” will be the largest wind farm in

Latin America in terms of investment and size.

To be located in the municipalities of Juchitán and El Espinal in the Isthmus of Tehuantepec, the project will

consist of 132 high-technology wind turbines with a total capacity of 396 megawatts.

Juchitán Mayor Gloria Sánchez López said the cash represented payment for a land-use change and a

construction permit for the wind farm, which will the municipality’s 14th.

Councilors will decide how the money is spent, she said, pointing out the payment will be made “transparently.”

https://www.evwind.es/2017/05/15/isthmus-of-tehuantepec-wind-energy-project-will-be-largest-in-latin-america/59817

PRESIDENT ENRIQUE PEÑA NIETO, ON DOMESTIC INNOVATION AND

GLOBAL ECONOMIC TRENDS.

In what ways is your administration improving the position of small and

medium-sized enterprises (SMEs) in Mexico?

PRESIDENT ENRIQUE PEÑA NIETO: We decided that any policy should be

aimed not only at companies, but also at entrepreneurs. Therefore, we

have two broad objectives: to promote innovative ventures through the

creation of capital funds and the development of innovation hubs for

entrepreneurs to develop their models, prototypes and first product tests;

and to support the modernisation of small businesses through training, consulting, financing and incorporating

new technologies to make them more productive.

At the start of this administration, Mexico had an underdeveloped entrepreneurship and innovation support

environment. A recent survey by the Organisation for Economic Cooperation and Development (OECD) ranked

Mexico as the Latin American country with the highest growth in innovative ventures between 2012 and 2016.

We are the country with the second largest number of start-ups in Latin America, and we enjoy the most even

distribution of support ecosystems and start-up developments anywhere in the region.

Thanks to the Simplified Stock Companies initiative, companies can now be created for free, via the internet, in

just 24 hours. Since 2012 we have supported more than 1.6m entrepreneurs and 730,000 SMEs through such

programmes.

How is the government ensuring that national infrastructure development aligns with the country’s growing

trade flows?

PEÑA NIETO: Despite a complex international economic context, infrastructure continues to be a key priority for

the country with 28 motorways and 58 highways having been completed since 2012.

With construction well under way, the new Mexico City International Airport will have an initial capacity of 50m

passengers – serving a possible 120m at the end of its second phase – elevating Mexico to the status of a key

air logistics hub in Latin America.

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Additionally, we are modernising our ports. In 2016 Mexico reached a capacity of 400m tonnes of operative

load, and by 2018 we aim to double port capacity from 2012 levels with expansions planned at Manzanillo,

Lázaro Cárdenas, Matamoros, Seybaplaya and Tuxpan, as well as the construction of the landmark New Port

of Veracruz.

The rail network will continue to be a key transport axis with intermodal terminals designed to improve logistics

efficiency, and key projects in the pipeline such as the Mexico City-Toluca train and a new border rail crossing

between Tamaulipas and Texas.

How are the automotive and aerospace industries contributing to research and development (R&D),

innovation and competition?

PEÑA NIETO: Mexico has become the seventh-largest producer and the fourth-largest exporter of vehicles

globally. To continue on this path we need to keep investing in human capital, which is our most valuable asset.

From 2014 to 2015 the number of graduates in engineering and technology programmes increased by 7%,

complemented by 200 R&D centres in the country. Approximately 65% of researchers at academic and

research centres have a postgraduate degree in the automotive sector and, on average, academic and

research centres devote 30-40% of their time to the automotive industry.

The government has also established an advisory council for the aerospace industry, focused on generating

strategies for supplier development, human capital, and technology and investment promotion. We expect to

increase industry production and generate up to 110,000 new jobs by 2020, underscoring our role in global

supply chains.

http://www.oxfordbusinessgroup.com/interview/president-enrique-pe%C3%B1a-nieto/mexico-

2017?utm_source=Oxford%20Business%20Group&utm_medium=email&utm_campaign=8248999_2nd%20Report%20Launch

%20-%20Mexico%202017%20-%20ABC%20Subscribers%20-%20DPC&utm_content=Launch-Mexico2017-Interview-

PresidentEnriquePe%C3%B1aNieto&dm_i=1P7V%2C4WSYV%2CMC8UUC%2CIMBIU%2C1

GLENCORE AGREES JV DEAL TO SUPPLY MEXICAN FUEL STATIONS.

Mining and commodities trading group Glencore is jumping into Mexico's

recently opened energy sector, one of the hottest investment tickets in the

industry, by setting up a retail station franchise and fuel supply deal with

local group Corporacion G500 SAPI (G500), it said on Thursday.

Mexico abolished in 2013 state oil firm Pemex's decades-old monopoly on

all oil production, refining and marketing, including retail markets.

Since then, the country has seen a flurry of investments.

On the retail side, this year alone, oil majors Exxon Mobil and BP have announced plans to build new gas stations

in Mexico and Royal Dutch Shell was quoted in local media as following suit.

"Our partnership with G500 expands our presence into downstream and retail businesses, a natural fit with our

global supply capabilities," Alex Beard, head of Glencore Oil, said in a statement on Thursday.

The new franchise will be called the G500 Network and will provide fuel, branding and ancillary retail services

to 1,400 fuel stations in Mexico, the company said.

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Formed in 2014, G500 is an association of service station owners, established in response to the deregulation

and represents around 12 percent of Mexico's service stations, selling around 160,000 barrels per day of diesel

and gasoline.

"This partnership is creating an innovative franchise that will improve competition, product quality and services

for the Mexican consumer," Antonio Caballero Fernandez, G500 president, said in the statement.

Unlike some of its competitors in oil, Glencore has so far steered clear of owning downstream assets like refineries

and retail stations.

Vitol, the world's largest independent oil trader, has invested heavily in retail in the last few years and lately

bought Turkey's retail group PetrolOfisi. Trading house Trafigura has a wide retail network focused in Africa with

its majority stake in Puma Energy.

http://www.reuters.com/article/us-glencore-mexico-g-idUSKCN18E0RC

MEXICO'S CFE ACCUSED OF DELAYING SOLAR INSTALLATIONS.

Mexico's state utility CFE is accused by photovoltaic (PV) industry

representatives of delaying the paperwork for private solar installations,

which would enable consumers to pay less for electricity, according to

local media.

A letter of complaint sent to energy regulator CRE and signed by Sergio

Arnaud, president of national solar power association Anes, Carlos

Eduardo Ortiz, president of Mexican PV industry association AMIE and Juan

Acra, president of energy council Comener claims the utility is not complying with the procedures outlined in

the manual for distributed generation.

The outlines of the country's nascent distributed generation model were published in February by the energy

ministry, aimed at boosting small-scale rooftop solar installation, allowing home and business owners to sell

surplus energy to CFE.

According to the International Energy Agency, Mexico's distributed solar energy has a market potential of

US$5.5bn, and is set to grow twentyfold by the end of 2020.

"Interconnection has been stalled constantly and without legal bases by CFE through its subsidiaries CFE

Distribución and CFE Suministro Básico," El Financiero quotes the letter as stating.

CFE is refusing to receive requests for solar panel installation and to sign contracts for interconnection, it

continues.

https://subscriber.bnamericas.com/en/news/electricpower/mexicos-cfe-accused-of-delaying-solar-installations

www.accesstoenergy.mx Page 15 to 15

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