Mexico's Energy Minister: Structural Reforms Still Needed

Challenges facing Mexico's energy sector include moving forward with structural reforms, according to energy minister Fernando Canales Clariond.

Reforms include management autonomy for state oil company Pemex, while other challenges range from guaranteeing supply to promoting renewables, Canales said in a presentation highlighting sector milestones during President Vicente Fox's administration.

These areas have been under discussion for some time, a sector analyst, who did not want to be named, told BNamericas.

Regarding Pemex autonomy, the analyst said this reform covers two areas: budgets and purchases.

Making the two areas more autonomous would increase efficiency, according to the analyst. Currently there is a high degree of oversight in assigning resources, primarily in congress, and in tender processes that must go through several filters.

The national energy policy is oriented towards sustainability, taking advantage of primary energy sources and looking toward nuclear energy, the energy ministry (Sener) head added.

In 2005, 240bn pesos (US$22.0bn) went toward Mexico's energy sector, up 45% from 2000, Canales said.

In the period, crude oil production rose 8.5% to 1.60 billion barrels a day (b/d), with gasoline output up 14.5% to 393,000b/d and diesel production up 17% to 265,400b/d.

However, another refinery is needed to reduce gasoline imports, according to Canales. The aim is to have the engineering details for the construction of a new plant, which could be built in Tuxpan and ready when the new president takes office in December.

Regarding electricity, the minister said 33 new generation plants were built from 2000-06, adding 12,800MW. Current installed capacity is 49,000MW.

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