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Energy
Mexican Crude Oil Mix Reaches New Historic Record High
May 21, 2008
Following the continuous increase in international crude oil prices, Mexican crude oil mix was sold at USD 112 per barrel, reaching the 27th historic record high so far this year. Pemex announced that Mexican crude oil prices are 84% higher than compared to figures from 2007. Oil prices are spiking to new trading highs as supply concerns intensify the buying momentum.
Crude Oil Output Falls 9% In 1Q, Lowest Since October 1999
May 23, 2008
Pemex said oil output slid to the lowest level since October 1999, falling 9% to 2.87 million barrels a day in the first four months of the year. Pemex said that output at its main Cantarell oil field dropped by 416,000 barrels a day, or 26% over the same period last year. That decline helped sink exports to 1.48 million barrels a day, down 13% from the year-ago period. Meanwhile, April natural gas production hit a new record of 6.71 billion cubic feet a day, compared with 5.97 billion in April 2007. Pemex said that natural gas output is increasing partially because the Cantarell oil field is pumping less oil. Oil wells that previously pumped oil are now pumping natural gas because the oil layer of the reservoir has narrowed as total reserves in the field are in decline.
Pemex Awards Condumex USD 268 Million Offshore Maintenance Contract
May 22, 2008
Pemex has awarded local industrial consortium Condumex a USD 268 million, four-year maintenance contract for offshore oil and natural gas platforms. The project is scheduled to begin in June or July. Pemex is heavily reliant on fields in the shallow waters of the Gulf of Mexico, which accounts for around 80% of Mexico's total oil production.
Pemex Launches Drilling Works Tender
May 20, 2008
Pemex launched tenders for drilling works in several gas producing fields in the Burgos and Veracruz basins. The works, which have an estimated value of USD 30.3 million, are set to last 730 days and begin on August 20. Works include vertical and directional drilling of wells in order to discover new deposits and evaluate the potential of the fields. Bids will be opened in late June and close by the end of July.
Sempra To Buy Indonesia LNG For Mexico Plant Starting 2Q 2009
May 22, 2008
San Diego-based holding company Sempra Energy announced it has locked in a 20-year contract with British Petroleum (BP) to supply Sempra's liquefied natural gas (LNG) terminal Energia Costa Azul (ECA), in the state of Baja California, with LNG from Indonesia. BP will begin supplying ECA in 2Q 2009, and in the meantime Sempra is buying individual cargos from exporters such as Qatar and Trinidad. Sempra owns 100% of the ECA facility, but has leased half of its capacity to Royal Dutch Shell under a 20-year contract.
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Trade & Investment
Mexico's Foreign Direct Investment Falls 36%
May 21, 2008
The Economy Ministry (SE) said that foreign direct investment (FDI) in Mexico fell 36% in 1Q 2008, to USD 4.2 billion, while the figure for the like-2007 period was USD 6.5 billion. SE said that the decrease was due to an atypically strong investment in the first trimester of 2007, which came after business-friendly Calderon was confirmed winner of the presidential election. Most of the investment in Mexico this year was from the U.S., while Germany followed with 8%, and Canada with 6%. Of the total, 52% went into manufacturing, 24% into commerce and 11% into financial services. On average, annual FDI has amounted to between USD 18 billion and USD 20 billion.
Mexico, China To Sign Agreement To Protect, Promote Investments
May 21, 2008
The Economy Ministry (SE) announced that Mexico and China have finished negotiating an agreement on reciprocal promotion and protection of investments (APPRI), which could be signed during President Calderon's visit to China in July. SE said that foreign direct investment (FDI) from China into Mexico from 1999 to 2007 totaled only USD 66 million. Mexican investments in China amount to approximately USD 150 million. Mexican firms with a presence in China include brewer Grupo Modelo, conglomerate Alfa, baker Grupo Bimbo and tortilla maker Gruma. China is Mexico's second-largest trade partner.
CFC Proposes Slashing Trade Tariffs
May 20, 2008
The Federal Competition Commission (CFC) proposed the gradual elimination of nearly all import tariffs, a simplification of Mexico's tariff codes and an overhaul of its customs procedures. In a nonbinding opinion presented to Congress, to the Economy Ministry (SE) and to the Finance and Public Credit Ministry (SHCP), CFC said the measures would increase Mexico's global competitiveness and diminish the practice of protecting specific local industries and sectors at consumer expense. The CFC estimates that Mexico could boost exports by 20%, imports by 11% and total investment by about 6% if it implements the proposed measures. SE is in general agreement with the proposals, which the CFC president expects to be controversial.
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Banking, Insurance & Finance
BMV Stock Exchange To Raise MXN 4.6 Billion In IPO
May 21, 2008
Mexico's stock exchange (BMV) said it expects to raise MXN 4.6 billion in an initial public offering (IPO) of its own shares on June 12. BMV plans to offer 121 million shares in Mexico and 15 million shares in the U.S. to qualified investors for between MXN 14 and MXN 19 a share. The mentioned MXN 4.6 billion is at the mid-point in that range; at MXN 19 per share, BMV would raise MXN 5.3 billion. The proceeds will be used to buy stakes in related businesses owned by banks and brokerages, to develop trading technology, and for other corporate uses.
Banobras Development Bank Aims To Help States Refinance Debt
May 20, 2008
Mexican infrastructure development bank Banobras, which recently backed a debt refinancing by the State of Mexico (Edomex) – one of the country's richest states – with loan guarantees, plans to extend that kind of help to other states. Earlier this month, Banobras provided partial loan guarantees on MXN 25.18 billion in debt that Edomex refinanced with eight banks, covering 87% of the state's total debt. Currently Banobras is not in talks with any particular state, but it expects to extend loan guarantees for more than MXN 40 billion by 2012 – the year the current government administration ends.
LandAmerica Gets License Approval For Mexico Title Insurance
May 19, 2008
U.S. provider of real estate transaction services LandAmerica Financial Group (LFG) said its Mexican unit received licensing approval from the government to operate as a title insurance underwriter in Mexico. LandAmerica said that with the recent approval for LandAmerica Title Insurance Co. of Mexico it becomes one of only two U.S.-based title insurance companies licensed to do business in Mexico.
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Business & Industry
PASA To Invest Over USD 30 Million In PET Recycling Plant
May 20, 2008
Mexican environmental services firm Promotora Ambiental (PASA) said it will invest more than USD 30 million in a polyethylene terephthalate (PET) recycling plant to be located in the State of Mexico (Edomex); the facility is expected to be operational by the end of the year. In addition, PASA announced it will begin dismantling ships in the port of Lazaro Cardenas, in the state of Michoacan, to commercialize scrap metal.
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Housing & Mortgaging
ICA To Build USD 140 Million Artificial Islands Off Panama City
May 20, 2008
Mexican engineering and construction company Empresas ICA plans to invest USD 140 million to build two artificial islands off Panama City, Panama. The two islands, which will be located 150 meters off the area called Puente Pacifica, will have a surface of 19 hectares and will be divided into 138 plots to be sold to investors so they can build luxury homes. The project will start shortly and will be ready in 2011.
Ixe Bank In Talks To Buy GMAC Mortgage Companies
May 20, 2008
Mexican banking group Ixe Grupo Financiero said that it is in preliminary talks with a subsidiary of GMAC Financial Services to buy its local mortgage lending operations. Ixe said it has held negotiations with Residential Capital (Rescap), to acquire 100% stakes in nonbank mortgage lenders GMAC Hipotecaria and GMAC Financiera. Ixe is a diversified financial group offering banking, asset management, and pension fund services to businesses and wealthier individuals.
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Retail
Oxxo, CIE Launch Oxxo Digital System
May 23, 2008
Mexican brewer Femsa's Oxxo convenience stores chain and local out of home entertainment company Corporacion Interamericana de Entretenimiento (CIE) announced that they will jointly launch the Oxxo Digital system, which consists of installing 2,260 digital screens – provided by CIE – in 1,130 Oxxo stores. The screens will provide clients with additional information on the products and services Oxxo offers.
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Telecommunications & Technology
Cofetel Authorizes Transition To HD Radio Broadcasting
May 21, 2008
The Federal Telecommunications Commission (Cofetel) announced that it is authorizing radio stations within 320 kilometers (200 miles) of the border with the U.S. to begin transmitting with digital HD Radio technology. Stations that want to transmit with the IBOC (HD Radio) system must request authorization from Cofetel and must commit to assisting the commission in studying the technology. U.S. telco and developer of the HD Radio technology iBiquity Digital said it is very grateful to the Mexican broadcasting industry for its decision to begin using HD Radio technology.
Telmex Interconnects Telefonica GTM Unit
May 22, 2008
Telmex announced that it has interconnected Spanish peer Telefonica's local unit Grupo de Telecomunicaciones Mexicanas (GTM) to its network and complied with an order issued by the Communications and Transport Ministry (SCT). However, GTM said that Telmex has not fully complied with SCT's ruling because there still are some issues regarding long distance calls. In response to GTM's complaint, Telmex said that glitches in the interconnection process are due to GTM's technical issues and unexpected changes in its facilities which have altered some communications networks' codes.
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Media & Entertainment
Televisa Gives Notice Of 14 Appeals Against IFE
May 20, 2008
The Federal Electoral Institute (IFE) has begun a process to sanction Mexican broadcaster Televisa for refusing to transmit political parties' ads during an electoral precampaign in the state of Nayarit. A recently passed law awarded political parties a certain amount of TV airtime to transmit their ads. In response, Televisa gave notice of 14 appeals against IFE. So far, Televisa and local peer TV Azteca have together given notice of 20 appeals against the mentioned law.
SCJN Denies Court Protection To Televisa's Gaming And Gambling Unit
May 21, 2008
Mexican broadcaster Televisa's Apuestas Internacionales gaming and gambling unit was denied court protection by the Supreme Court (SCJN) as the company sought to avoid paying taxes on its raffles, bets, gaming and gambling operations in each and every one of the country's 32 states. SCJN stated that collecting taxes for the said activities was not exclusively a federal prerogative.
Yahoo!, Telcel Enter Alliance To Provide Mobile Advertising Services
May 23, 2008
Mexican mobile telephony provider Telcel and Internet search engine Yahoo! entered an alliance to offer mobile advertising services through phones featuring the Wireless Application Protocol (WAP). WAP's main use is to enable access to the Internet from a mobile phone or PDA. Telcel said that searching will be free for all of its users but once customers begin accessing content in websites they will be charged MXN 0.8 per kilobyte (KB). Telcel expects the use of this new advertising service to gain popularity among advertisers within 9 to 12 months.
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Farming & Agriculture
Mexico Lifts Import Tariffs On Staple Foods
May 25, 2008
President Calderon said he would eliminate import tariffs on corn, rice, wheat, sorghum and other products to prevent shortages amid pressure in global food markets. Calderon also announced a tariff-free import quota for beans and said he would seek agreements with the food industry to avoid sharp price increases in basic products. Tariffs and quotas in farm trade between Mexico, the U.S. and Canada were eliminated at the start of 2008 under the North American Free Trade Agreement (NAFTA). Calderon did not say when the tariffs would be lifted nor specified whether the measures would be temporary or permanent. The President promised several actions to help farmers, including modernizing irrigation systems for 214,000 hectares (528,805 acres) by the end of the year.
Cereal Imports Grow 102% Between January And March
May 20, 2008
According to reports by the foreign trade inter-institutional working group – compiled by the Bank of Mexico (Banxico), the Economy Ministry (SE), the Finance and Public Credit Ministry (SHCP) and the National Statistics Institute (INEGI) – imports of cereals and grains, including corn, wheat and rice, increased 102.2% at annual rates during the first three months of 2008. The group said that purchases of the said staple foods amounted to USD 1.12 billion between January and March this year, USD 570 million more than what was paid during the like-2007 period.
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Hospitality & Tourism
The Related Group To Invest USD 1 Billion In Mexico
May 23, 2008
U.S.-based real estate developer The Related Group (RG) said that it plans to invest USD 1 billion in five beach projects during the next three years. The projects will be located at Puerto Vallarta, Acapulco, Ixtapa Zihuatanejo and Los Cabos, in the states of Jalisco, Guerrero and Baja California, respectively. RG is currently building the ICON Vallarta project, which features three towers of ultra-luxury condominiums totaling 343 units. Average price is USD 3,000 per square meter.
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Economy
Mexico Announces Measures To Counter Rising Food Prices
May 26, 2008
President Calderon said that his government will take measures to help people in extreme poverty overcome rising food prices. The measures include importing a tax-free quota of beans; the elimination of tariffs on wheat, corn, rice, sorghum and soy pasta; slashing duties on powdered milk; and giving an additional monthly USD 11.55 cash subsidy to 26 million poor Mexicans. The subsidy program is expected to cost about USD 433 million. The government also will use record-high oil profits to help maintain below-market prices for gasoline, diesel and natural gas.
Mexican Economy Grew 2.6% In 1Q
May 22, 2008
The government said that Mexico's economy grew at a 2.6% rate in 1Q, a lower-than-expected growth rate if compared to figures from the like-2007 period. The government said that the economy also expanded 0.51% in 1Q over 4Q 2007, despite a steep slowdown in the U.S. The slowdown in the U.S., which is suffering through a crisis in credit markets and a slump in the housing industry, is expected to hurt Mexico's economy this year. Mexico's economic growth was affected by the timing of the Holy Week holidays, which fell in March this year and April last year.
Mexican Peso Rises To Highest Level In Five Years
May 19, 2008
The Mexican peso (MXN) rose to its highest level in almost five years due to oil sales at recently historic high prices, remittances and on speculation central bankers will raise interest rates this year to stem inflation. The U.S. dollar (USD) was purchased at MXN 10.36 and sold at MXN 10.48. The MXN peso has appreciated 5% during the year, a figure representing a MXN 0.54 increase.
Mexico Inflation Hits Three-Year High In Early May
May 22, 2008
Mexico's annual inflation accelerated in early May to its fastest clip in more than three years as a world food crisis pushed up costs for staples like rice and chicken. Central Bank (Banxico) data showed consumer prices rose 4.83% in the 12 months through mid-May, adding pressure on the bank to raise interest rates despite a looming economic slowdown.
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Border & Migration
U.S. Announces New Temporary Worker Visa Procedures
May 22, 2008
The U.S. announced federal regulations to streamline the way foreign workers enter the country for seasonal jobs as restaurants and resorts face summer staff shortages. The U.S. Department of Labor is rewriting rules to help employers find and hire workers for temporary jobs more quickly and efficiently than current guidelines allow. In one major change affecting industries such as construction and shipyards, the definition of "temporary" will be drastically expanded – from the current 10 months to three years – and significant adjustments will be made to the so-called H2B visa program.
Expulsion Of Illegal Immigrants Could Cost The U.S. USD 1.8 Trillion A Year
May 20, 2008
According to a report by Waco-based economic analysis firm Perryman Group, if the 8.1 million undocumented immigrants in the U.S. were deported to their countries of origin, the U.S. economy would lose nearly USD 1.8 trillion in annual spending. Perryman said that with many of the nation's baby boomers retiring and the nation experiencing a low unemployment rate, undocumented immigrants are performing the jobs other U.S. workers could not. Perryman also found that undocumented immigrants contribute an average USD 652 billion to the U.S. GDP every year.
Canadian Firms To Begin Recruiting Mexican Personnel
May 20, 2008
The State of Mexico's (Edomex's) Labor and Social Welfare Ministry (STPS) said that it has signed labor agreements with government officials from the Canadian provinces of Alberta, Quebec, Ontario and British Columbia to send Mexican personnel to work in Canadian companies. STPS said it will begin the recruiting process within a month. Interested companies have already submitted the profiles of the professionals they are seeking to hire and emphasized that the most important requirement is proficiency in English.
U.N.: Mexico Violations Of Immigrants' Human Rights Worse Than In The U.S.
May 20, 2008
According to the United Nation's (U.N.'s) Special Rapporteur on the human rights of migrants, Jorge Bustamante, violations of Central American immigrants' human rights in Mexico are worse than those suffered by Mexican undocumented immigrants in the U.S. Bustamante said a large number of Mexicans treat Central Americans with great disrespect and that certain sectors of the Mexican population are very racist toward immigrants from countries south of the border.
MMAN: U.S. TV Feeds Hate And Fear Toward Immigrants
May 21, 2008
According to a report by the Media Matters Action Network (MMAN), U.S. cable television nourishes hate and fear toward undocumented immigrants. The report documents the rhetoric of the most outspoken opponents of immigration and highlights the threatening language that can be heard on influential cable news networks regarding illegal immigration. Despite the fact that numerous studies have found that immigrants generally commit fewer crimes than their U.S.-born neighbors, the MMAN says that some "programs are decidedly obsessed with the matter."
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Politics
Opposition Renews Battle Against Governor In Oaxaca
May 19, 2008
Teachers in the state of Oaxaca went on strike to demand resolution of the problems that sparked a six-month-long political and social conflict in the state two years ago. Supporters of grassroots groups allied with the teachers marked the start of the strike with a massive march in Oaxaca City, capital of the impoverished, heavily Indian state. Protesters are again demanding the resignation of Oaxaca Governor Ulises Ruiz, whose supporters are widely blamed for most of the score of deaths that took place in 2006, including the killing of U.S. independent journalist Brad Will.
SHCP Minister, Predecessor Summoned To Appear Regarding MXN 13 Billion
May 20, 2008
The Surveillance Commission of the Federal Superior Audit office (ASF) suggested that Finance and Public Credit (SHCP) Minister Agustin Carstens and his predecessor Francisco Gil appear before the office and disclose the whereabouts and use of MXN 13 billion that were not transferred – as should have happened – to the Oil Income Stabilization Fund (FEIP). According to the head of the Surveillance Commission, the funds should have been transferred to the FEIP during the last year of the Fox administration (2006).
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Justice, Safety & Crime
Congress Trims Bush's Mexico Drug Plan
May 23, 2008
The U.S. Senate approved USD 350 million to aid Mexico in the battle against drug trafficking but reduced the Bush administration's request, which would have sent USD 500 million. The Senate adopted language similar to that in a recently passed House bill that would hold up a quarter of the money until the U.S. State Department ruled that Mexico was meeting certain human rights markers. However, Mexican media and lawmakers, along with public opinion, have been infuriated and have said that accepting the U.S. conditions would be giving away the country's sovereignty. President Bush's proposal called for spending for military hardware, mostly helicopters, but also programs to root out corruption within law enforcement agencies and increase the protection of witnesses. The Congressional plans would scrutinize any money directed to the army.
U.S., Mexican Officials Discuss Security Issues At Mexico's Southern Border
May 19, 2008
Intelligence officials from both the U.S. and Mexican governments met at Mexico's Interior Ministry (SEGOB) offices to discuss security issues at Mexico's southern border, including the presence of groups that are linked to organized crime and the guerillas at the border with Belize and Guatemala. Sources say that attendants of the meeting, which was held with utmost discretion, included U.S. military intelligence officials and personnel from investigation agencies. U.S. Customs and Border Protection (CBP) Commissioner Ralph Basham produced a document detailing negative effects of the said security issues and bilateral cooperation proposals.
Soldiers Take Over Towns' Police Forces Amid Drug Violence
May 23, 2008
The army has taken over the police departments in the towns of Villa Ahumada, in the state of Chihuahua, and in Zirandaro, in the state of Guerrero, as police officers have been killed, fled or quit, as did other government officials. Assailants have barged into towns and have executed police chiefs, leading the reduced police force and government officials to quit or be killed.
DF Mayor Places Public Security Forces Under Unique Commands (Unipol)
May 20, 2008
Mexico City (DF) Mayor Marcelo Ebrard announced the Unique Police Command (Unipol) program, which is a strategy consisting of placing the public security forces and the judicial police under the command of DF Public Security Minister Joel Ortega and DF Attorney General Rodolfo Felix. The police forces will be under the command of Ortega in the Cuauhtemoc, Gustavo A. Madero and Miguel Hidalgo districts, whereas Rodolfo Felix will command the units at the Benito Juarez and Iztapalapa districts.
Federal Authorities Seize Several Tons Of Drugs
May 19, 2008
Federal authorities, including soldiers, the navy and police, seized several tons of marijuana, cocaine, and pseudoephedrine – an essential supply in the production of methamphetamine – in separate operations throughout the country. Total marijuana seizures amounted to 6.8 tons and were found in ships offshore and inside a facility of Japanese electronics firm Sharp. Pseudoephedrine seizures amounted to about 2.6 tons and cocaine seizures totaled 477kg. Seizures were made in the states of Sinaloa and Baja California and at Mexico City's International Airport. In another operation, the army found USD 5.7 million, 13,000 cartridges, 24 cell phones, 4 radios and 2 vehicles at the house of suspected drug traffickers in Sinaloa.
Drug Traffickers Recruit U.S. Citizens To Legally Purchase Weapons
May 20, 2008
According to the U.S. Bureau of Alcohol, Tobacco and Firearms (ATF), Mexican drug cartels are recruiting or "renting" U.S. citizens to legally acquire arms at weapons and ammunitions fairs and shows and avoid drawing authorities' attention. The ATF said that there are about 100 weapons fairs and exhibits per week in several U.S. border states, and that about 1,000 arms are sold in two days. ATF said it is difficult to estimate how many of those arms end up in Mexico.
U.S. Marine Is Wounded Near Mexican Checkpoint
May 21, 2008
Authorities are investigating a shooting in which Mexican soldiers wounded U.S. marine Pfc. Joshua Kendall Monnet, who was driving a vehicle near a checkpoint. Military authorities based in Ensenada, in the state of Baja California, said the soldiers at the checkpoint instructed Kendall Monnet to stop his vehicle and he apparently failed to do so, although details of what led them to shoot were not released. Kendall Monnet was not seriously hurt.
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Health & Science
Mexico Attracts Foreigners Seeking Euthanasia
May 20, 2008
At least 200 terminally ill people from Australia, Britain, New Zealand and the U.S. have visited Mexico since 2001 to buy a cheap, widely available euthanasia drug. Australian pro-euthanasia and nonprofit organization Exit International promotes Mexico as a destination for patients seeking to end their lives. The organization says that nembutal, a drug usually used to put down animals, is widely, cheaply and legally available, not only in Mexico but in many other South American countries.
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Sports
Deportivo La Coruña Set To Sign Mexican Striker Omar Bravo
May 22, 2008
Spanish soccer club Deportivo La Coruña is about to sign Mexican striker Omar Bravo to a three-year contract. Bravo, 28, would join on a free transfer after completing his contract with Mexico's Chivas. Bravo would team up with Mexican midfielder Andres Guardado, who joined Deportivo La Coruña from Atlas last year. In April, Bravo became the second player in Chivas' history to score 100 goals. Deportivo La Coruña will play in the offseason Intertoto Cup, which awards the winner the UEFA Cup.
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Arts & Culture
Mexican Coin Elected World's Most Beautiful
May 20, 2008
The Finance and Public Credit Ministry (SHCP) announced that Mexican "Piedra de los Soles" (Stone of the Suns) 1kg silver coin was elected World's Most Beautiful during the 25th Mint Directors Conference, held in South Korea. The coin, also known as "Aztec Calendar," is part of Mexico's Central Bank (Banxico) Pre-Columbian Series issued since 1992. The Mint Directors Conference is held every two years and mints from around the world vote on the best coins based on beauty and technical difficulties in elaboration criteria.
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Other
Mexican Businessman Garza Laguera Dies At 84
May 25, 2008
Mexican businessman Eugenio Garza Laguera, whose family controls beer and soft-drink bottler Fomento Economico Mexicano SA (FEMSA), died of natural causes. Garza Laguera, 84 at death, earned a chemical engineering degree from the University of Texas, began work at the family business in 1947 and stepped down as chairman of FEMSA in March 2001, handing over direction of the company to his son-in-law, Jose Antonio Fernandez. Garza Laguera, the son of Eugenio Garza Sada – the founder of the Tec de Monterrey University – is survived by his wife, Eva Gonda de Garza Laguera and his five daughters.
Shark Wounds American Surfer Off Mexico's Pacific Coast
May 25, 2008
A shark injured a 49-year-old American surfer off the Pacific coast of Mexico, in the third attack in a month. The Mexican Navy deployed personnel to warn people about sharks at beaches in Zihuatanejo, a resort northwest of Acapulco, in the state of Guerrero. A day earlier, a 21-year-old Mexican surfer was killed by a shark off a nearby beach. The two attacks came a month after a shark killed a San Francisco man surfing in the same area.
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