The MasterBlog: Mexico Plans Coalbed Methane Auction in Wake of Massive Land Grab
Subscribe to The MasterBlog in a Reader Subscribe to The MasterBlog by Email

MasterBlogs Headlines

Monday, September 10, 2007

Mexico Plans Coalbed Methane Auction in Wake of Massive Land Grab

Resource Investor - News that trades


Mexico Plans Coalbed Methane Auction in Wake of Massive Land Grab

By Tim Wood
06 Sep 2007 at 09:19 PM

St. LOUIS (ResourceInvestor.com) -- Mexico’s Minister of Mining has compounded uncertainty about the motivation behind a secretive project that has ensnared more than 320 million hectares of prospective mineral concessions in the country. Dr. Norberto Roque addressed industry stakeholders at a hastily convened meeting in Vancouver, as we reported late yesterday (Wed. 5 Sep.)

Roque said the government had elected not to announce the process publicly because of political sensitivity. He mentioned the privatization of the national hydrocarbons giant Petróleos Mexicanos (PEMEX) as one pressure point.

Roque said the staking was precipitated by legislation codified in April 2006 by the previous government. Acknowledging that that legislation had an error requiring correction, Roque said they wanted to avoid having to re-legislate the issue. In order to “protect the mining industry from oil companies” his officials had decided to stake all areas thought to have potential for coalbed methane.

A source who attended the briefing described the explanation as perplexing. “The Ministry has effected what it sought to avoid. At least oil companies might have been more discreet and selective in their staking.”

The Mexican government is set to embark on a program of fine-tuning the stakings so that only coalbed methane deposits are locked into the state portfolio. It then intends to auction those assets.

A geologist scoffed at the idea that the government or anyone else could efficiently distinguish between concessions as being more prospective for coalbed methane than other minerals. Indeed, the implication is that coalbed methane will always carry the benefit of the doubt, especially given the size of the land packages involved and the limited staff relies on.

Highlighting the risk of arbitrary decision-making, a geologist attending the meeting asked the Minister who would decide what qualified as coalbed methane. The answer he received did not instill any confidence as the Minister merely repeated his assertion that the government was acting to protect miners from oil companies.

It is unclear how Mexico’s staking activity comports with NAFTA agreements.

It is possible that Mexico is considering revising its minerals legislation to separate exploitation rights so that gas exploration and development could be conducted on concessions earmarked for development related to other minerals. Doing so could create a “double-dipping” opportunity for the government since it could effectively levy fees twice over from the same land.

There is already a precedent in Canada where firms are squabbling over the definition of coalbed methane as a natural gas with separate drilling rights. As such, companies with mineral rights to coal beds would have to allow companies with natural gas rights to prospect on their land even though the gas is embedded in the ore they have title to.

In the meantime, hard rock mining and exploration companies are frozen out of massive areas of Mexico because the ostensible “coalbed methane” concessions that have been staked do not allow for any other activity unless new legislation is written.

© Copyright 2007, Resource Investor.

No comments:

Post a Comment

Commented on The MasterBlog

Tags, Categories

news United States Venezuela Finance Money Latin America Oil Current Affairs Middle East Commodities Capitalism Chavez International Relations Israel Gold Economics NT Democracy China Politics Credit Hedge Funds Banks Europe Metals Asia Palestinians Miscellaneous Stocks Dollar Mining ForEx Corruption obama Iran UK Terrorism Africa Demographics Government UN Living Bailout Military Russia Debt Tech Islam Switzerland Philosophy Judaica Science Housing PDVSA Revolution USA War petroleo Scams articles Fed Education France Canada Security Travel central_banks OPEC Castro Nuclear freedom Colombia EU Energy Mining Stocks Diplomacy bonds India drugs Anti-Semitism populism Arabs Brazil Environment Irak Saudi Arabia elections Art Cuba Food Goldman Sachs Syria Afghanistan Hamas Lebanon Silver Trade copper Anti-Israel Egypt Hizbollah Madoff Ponzi Warren Buffett press Aviation BP Euro FARC Gaza Honduras Japan Music SEC Smuggling humor socialism trading Che Guevara Freddie Mac Geneve IMF Spain Turkey currencies violence wikileaks Agriculture Bolívar ETF Restaurants Satire communism computers derivatives Al-Qaida Bubble FT Greece NY PIIGS Republicans Sarkozy Space Sports BRIC CITGO DRC Flotilla Germany Globovision Google Health Inflation Law Libya Mexico Muslim Brotherhood Nazis Pensions Peru Uranium cnbc crime cyberattack fannieMae pakistan stratfor Apollo 11 Autos BBC Bernanke CIA Chile Climate change Congo Democrats EIA Haiti Holocaust IFTTT ISIS Jordan Labor M+A New York OAS Philanthropy Shell South Africa Tufts Ukraine bitly carbon earthquake facebook racism twitter Atom BHP Beijing Business CERN CVG CapitalMarkets Congress Curaçao ECB EPA ETA Ecuador Entebbe Florida Gulf oil spill Harvard Hezbollah Human Rights ICC Kenya L'Oréal Large Hadron Collider MasterBlog Morocco Nobel Panama Paulson RIO SWF Shiites Stats Sunnis Sweden TARP Tunisia UN Watch Uganda VC Water Yen apple berksire hathaway blogs bush elderly hft iPad journalism mavi marmara nationalization psycology sex spy taxes yuan ALCASA ANC Airbus Amazon Ariel Sharon Australia Batista Bettencourt Big Bang Big Mac Bill Gates Bin Laden Blackstone Blogger Boeing COMEX Capriles Charlie Hebdo Clinton Cocoa DSK Desalination Durban EADS Ecopetrol Elkann Entrepreneur FIAT FTSE Fannie Freddie Funds GE Hayek Helicopters Higgs Boson Hitler Huntsman Ice Cream Intel Izarra KKR Keynes Khodorskovsky Krugman LBO LSE Lex Mac Malawi Maps MasterCharts MasterFeeds MasterLiving MasterMetals MasterTech Microsoft Miliband Monarchy Moon Mossad Mugabe NYSE Namibia Nestle OWS OccupyWallStreet Oman PPP Pemex Perry Philippines Post Office Private Equity Property Putin QE Rio de Janeiro Rwanda Sephardim Shimon Peres Stuxnet TMX Tennis UAV UNHRC VALE Volcker WTC WWII Wimbledon World Bank World Cup ZIRP Zapatero airlines babies citibank culture ethics foreclosures happiness history iPhone infrastructure internet jobs kissinger lahde laptops lawyers leadership lithium markets miami microfinance pharmaceuticals real estate religion startup stock exchanges strippers subprime taliban temasek ubs universities weddimg zerohedge

Subscribe via email

Enter your email address:

Delivered by FeedBurner

AddThis

MasterStats