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Mexico auctions off four state sugar mills
June 14, 2015
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MEXICO CITY: Mexico has auctioned off four state sugar mills, selling them for a total of 3.28 billion pesos ($213 million), but the tender for five other mills was declared void after no bids were presented.

The Atencingo and San Cristobal mills were sold to Impulsora Azucarera del Noroeste for 1.97 billion pesos, while the Casasano and Emiliano Zapata sugar mills were awarded to Grupo Beta San Miguel for 1.31 billion pesos, said FEESA, the government-run fund that administers the mills.

Javier Dorantes, a director at the privatisation arm of Mexico’s finance ministry, said the remaining mills would be sold through a public auction.

“The aim of the government is to sell all the mills, and we will review the best way to do it,” Dorantes said.

The tender of the nine sugar mills, which together produce about one quarter of Mexico’s annual output, is the latest step in an effort to unwind a government takeover of the mills that began over a decade ago.

Mexico expropriated 27 mills in 2001 due to major financial problems with the plants, and has since been gradually selling them to private operators.

Meanwhile, Mexican state oil company Petroleos Mexicanos (Pemex) said on Thursday that it had made one of its biggest discoveries in years, unveiling new shallow water oil fields in the southern Gulf of Mexico that could produce 200,000 barrels per day (bpd) by mid-2018.

The total proven, probable and possible reserves of the fields could be as high as 350 million barrels of crude-oil equivalent, Pemex’s Chief Executive Officer Emilio Lozoya told an oil conference in Guadalajara.

The new fields off the coast of Tabasco and Campeche states comprise three of light crude and one of heavy crude, and could start coming on stream in 16 months, Pemex said.

“It’s a recent achievement and one of great magnitude,” Lozoya said.

The fields would take around three years to reach their full 200,000 bpd capacity, Jose Antonio Escalera, director of exploration for Pemex, told Mexican radio.

Pemex described the finds as its biggest exploration success in the last five years after the discoveries in Tsimin-Xux and Ayatsil, also in the southern Gulf.

Located near the super giant Cantarell oil field found in the 1970s and Pemex’s most productive current field Ku Maloob Zaap, the finds could boost revenue for the government, which relies on Pemex income to provide about a third of the federal budget.

CEO Lozoya said the discoveries could also make the company reconsider its production forecasts.

The new hydrocarbon finds were also expected to generate production of 170 million cubic feet of gas per day.

Output at Pemex has fallen from a peak of 3.4 million bpd in 2004 to less than 2.4 million bpd currently.

Following a reform to end the company’s oil and gas monopoly, Pemex also faces the prospect of tough competition from oil majors and other private companies coming to Mexico.

Mexico will auction 14 oil and gas exploration and production blocks not far from the new fields this summer, and Energy Minister Pedro Joaquin Coldwell said at the Guadalajara event that the finds would make the tenders more attractive.

Meanwhile, Mexico has cut the estimated investment required for a wholesale mobile broadband network by almost a third to $7 billion and is considering changes to make it more attractive to wireless operators, a senior government official said recently.

Reuters

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