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Mexican oil, gas and petrochemicals

Hydrocarbon Engineering,

Oil and gas

BMI has commented that Mexico’s ongoing and historic energy sector reforms mark the start of a fundamental shift for the country’s hydrocarbons sector. However, it will be a number of years before results are felt in the country’s production and reserves data, according to BMI. Over the long term the reforms will however bolster upstream activity and likely reverse a nearly decade long decline in oil production.

BMI believes that the Mexican energy sector will be an out performer amid a bleak oil price environment, due to proven below ground resources that reduce exploration risks, improvements in above ground conditions and a large immediate market available for oil and gas sales.


During much of 2014, Mexico’s petrochemicals production fell in spite of rising economic activity. BMI has said that this indicates that rising demand was benefitting imports and domestic producers were struggling to compete. On the upside, investment in Mexican petrochemicals is set to rise following energy reforms, which open up the upstream sector to private investment. BMI has said that the petrochemicals industry is going to be primarily focused on the Etileno XXI project which is due to stream in Q415.

A range of expansions are planned for propylene, ethylene glycol, paraxylene and ethanolamines. However, BMI has commented that many of these projects are yet to get underway and a glut in the market over the medium term, potentially caused by over supply in the US market, could prompt a revision or cancellation. When it comes to domestic end use markets, construction and automotive sectors will be crucial.

Edited from report briefs by Claira Lloyd

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