Mazatlan — Alberta-based oil and gas and power sector companies could generate “billions of dollars of opportunities” as a result of a memorandum of understanding (MOU) Alberta Energy Minister Marg McCuaig-Boyd will sign in Mexico City next week, says the minister.
McCuaig-Boyd, who will travel to Mexico from Sept. 29 to Oct. 3, told the Daily Oil Bulletin she believes the MOU, which she will sign with the Mexican Energy Secretariat (SENER), will “give us [the Alberta government, businesses and institutions] a framework to do more.”
She said there are numerous opportunities to take advantage of the historic reform of Mexico’s oil and gas and power sectors, which is seeing the 80-year-old monopolies of integrated oil and gas company Petroleos Mexicanos and utility Comision Federal de Electricidad (CFE) come to an end.
That has already led to several Alberta-based companies becoming involved in the country, including Calgary-based junior oil and gas producers Renaissance Oil Corp. and International Frontier Resources Corp.
In addition, Calgary-based TransCanada Corporation has become a leader in the country’s power sector, having built or is developing several natural gas pipelines, as well as oil storage facilities and Calgary-based ATCO Group has won contracts to build pipelines and a power plant in the country, and has said it plans to establish a significant presence in Mexico.
It has been estimated that Mexico will need US$164 billion in investments in electricity generation, transmission and distribution over the next 20 years.
Alberta-based academic institutions have also cemented ties with the country and with SENER. For instance, this past spring the University of Calgary and the Mexican energy secretariat signed a collaboration agreement which will see the university assist the country’s energy industry in areas such as research and education. That was backed up by a $12 million commitment over the next four years from SENER.
Last December, the University of Alberta signed a similar agreement, which will see it assist in research and develop collaborative graduate degree programs with Mexican research universities and institutions. SENER is investing $16 million in that pact.
McCuaig-Boyd said she understands other Alberta-based institutions, such as the Southern Alberta Institute of Technology (SAIT), which is about to sign a deal with the country to assist in technological training, will become involved in Mexican energy industry and power sector development.
In addition, Mexico has signed an agreement with the Alberta Energy Regulator (AER) to help it develop environmental, safety and other regulations for its land-based oil and gas sector.
One of the biggest opportunities for Alberta-based companies is in the oilfield service and midstream areas, she said.
“Alberta is a world leader in energy and the service sector can help with what Mexico is doing,” she said.
A recent study commissioned by the Alberta government, conducted by Mexican-based Market Intelligence Latin America, S.C., concluded that there are potentially billions of dollars in opportunities in Mexico in the enhanced oil recovery (EOR) area, using technologies such as waterflooding and natural gas injection.
It concluded that there is the potential to unlock as much as 12.2 billion bbls of reserves using EOR techniques, which Pemex has not utilized to any great extent.
McCuaig-Boyd said the relationship with Mexico was further enhanced after she met with Pedro Joaquin Coldwell, Mexico’s secretary of energy, at a conference this past February in Houston, as well as at the Global Petroleum Show, held this past June in Calgary.
Last week that relationship was further develped when the Mexican consulate held an event in Edmonton to mark the 206th anniversary of Mexican independence, during which she said several prominent Mexican and Alberta business people attended. She also attended that event.
McCuaig-Boyd, who is from Fairview, said she has shared her views about the opportunities in the service sector with oil and gas service companies in her northwestern Alberta constituency and most appreciate the potential that exists going forward.
She said SENER also wants Alberta’s help in dealing with methane emissions, as well as developing renewable power.
The country has committed to move from about 15 per cent of its electricity being generated by renewables to 30 per cent by 2030.
The MOU, which she will sign during her trip to the country, from Sept. 29 to Oct. 3, will focus on:
- Energy policies, including greenhouse gas and methane emissions;
- Electricity and renewable power;
- Developing heavy oil and unconventional resources; and
- Increasing value-added developments and energy-related trade and investments between Alberta and Mexico.
The minister’s trip coincides with an event on Oct. 4-5, which will see 20 Canadian companies explore midstream opportunities in the country.
The Mexico Midstream Mission, sponsored by the Alberta government, will see companies like Alberta Tank Fabrication, Exchanger Industries Limited, Gas Liquids Engineering Ltd. and Innova Global travel to Mexico City for the event.
The cost of that mission has not yet been released, but McCuaig-Boyd’s office said her trip to Mexico City will cost $15,300. That will include her travel and related costs and those of a political staff member and two public servants.