Connect with us

Falling Peso and Oil Prices Plague Mexico’s Prospects

Published

on

Cushing, OK WTI Spot Price FOB (Dollars per Barrel)

Cushing, OK WTI Spot Price FOB (Dollars per Barrel)

Source: Thomson Retuers, EIA

The falling global price of oil is having a material impact on fiscal budgets with regard to fossil fuel-reliant economies. Being a key oil exporter to the United States, Mexico is on the brink of opening foreign investment in the energy sector, planning auctions in 2015. Meanwhile, large-scale energy companies, plush with cash, are considering decreasing activity in oil exploration and possibly production. Exxon Mobil Corporation had US$ 42.5 billion in capital spending for 2013. Exxon’s capital spending in 2014 till the end of October has been US$ 28 billion. Houston-based ConocoPhillips indicated in late October, they will spend less than US$ 16 billion in 2015. Essentially, a falling fossil fuel price environment will limit capital spending by large oil giants. This would stymie private energy capital investment into Mexico. To compound the issue of falling oil prices, OPEC isn’t looking to cut production, and some oil economists believe OPEC is attempting to squeeze out higher cost competition over time.

BlackRock is the biggest money manager holder of peso bonds due 2024.

New Era of Energy

In December, the Mexican government approved constitutional amendments to permit private companies to invest in Mexican energy resources. Oil companies such as Statoil, Royal Dutch Shell, BP and Chevron are already operating in the Gulf, near Mexican boundaries. Furthermore, Petróleos Mexicanos (PEMEX) doesn’t have the technical capabilities, nor excess capital to access offshore oil and onshore shale.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Blackstone and Goldman Invest in Francisco Partners

Published

on

Larger alternative investment houses and banks are taking ownership stakes in specialist private equity firms. On July 13, 2018, Blackstone Group’s Strategic Capital Group and Goldman Sachs Asset Management’s Petershill program acquired a minority stake in San Francisco-based Francisco Partners. Francisco Partners is a private equity firm focused on tech-related companies, competing against Thoma Bravo, BC Partners, Vista Equity Partners, Bain Capital and other specialists.

Dipanjan (DJ) Deb is the Co-Founder and CEO of Francisco Partners. Before forming the company in 1999, he was a Principal at Texas Pacific Group (TPG).

Advisors

Francisco Partners was advised by Evercore and Kirkland & Ellis LLP. Simpson Thacher served as legal counsel to Blackstone and Fried Frank served as legal counsel to Goldman Sachs.

Continue Reading

GE Joins Mitsubishi and Summit Power on Bangladesh Thermal and LNG Massive Development

Published

on

General Electric, Japan-based Mitsubishi Corporation, and Bangladesh-based Summit Power Limited formed a joint venture to invest and construct a US$ 3 billion thermal power plant with a capacity of 2,400 megawatts. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

PGGM Executed its Inaugural Cleared Securities Lending Trade

Published

on

Service providers are keen on getting more beneficial owners to participate in the cleared securities lending market. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Popular

© 2008-2018 Sovereign Wealth Fund Institute. All Rights Reserved. Sovereign Wealth Fund Institute ® and SWFI® are registered trademarks of the Sovereign Wealth Fund Institute. Other third-party content, logos and trademarks are owned by their perspective entities and used for informational purposes only. No affiliation or endorsement, express or implied, is provided by their use. All material subject to strictly enforced copyright laws. Registration on or use of this site constitutes acceptance of our terms of use agreement which includes our privacy policy. Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, pensions, endowments, superannuation funds, family offices, central banks and other long-term institutional investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues. SWFI facilitates sovereign fund, pension, endowment, superannuation fund and central bank events around the world. SWFI is a minority-owned organization.