Energy Reform in Mexico to be Significant Event for the Oil & Gas Industry: Barclays Managing Director James West Shares His Views on the Sector in an Exclusive Wall Street Transcript Interview

Wall Street Transcript

67 WALL STREET, New York - July 9, 2014 - The Wall Street Transcript has just published its Oil & Gas Review 2014 Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Oil & Gas Review 2014

Companies include: Schlumberger Limited (SLB), Halliburton Company (HAL), Key Energy Services Inc. (KEG), Superior Energy Services Inc. (SPN), PetroChina Co. Ltd. (PTR), Sinopec Shanghai Petrochemical (SHI), CNOOC Ltd. (CEO), Baker Hughes Inc. (BHI), Weatherford International Ltd. (WFT) and many more.

In the following excerpt from the Oil & Gas Review 2014 Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Is the increase we are seeing in North America right now being driven by the shale situation?

Mr. West: The situation in North America right now is the result of two things. The first one is clearly oil shale drilling and the production coming from those shales, but the second is that the Gulf of Mexico continues to improve. So the Gulf of Mexico will likely improve 20% year over year and onshore activity will also rise. We think that the growth of E&P spending of 8.5% in the U.S. probably leads to a well count increase in the low-double digits and an increase in the rig count of perhaps 3% or 4%.

TWST: Mexico is currently on track to pass constitutional reforms that will allow privatization of Pemex, or at least open up the sector to private companies. How will that impact the oil industry, in your opinion?

Mr. West: I think energy reform in Mexico will be a very significant event for the industry. It will take multiple years to play out, but when it does, it could have a significant impact.

After the reforms go through, Pemex will increase overall spending, because it will no longer have the same pull on its capital from the government as they had before. Currently it is the primary supplier of capital to the government due to taxes, and once that situation is changed, Pemex will have more money to allocate to exploration and production.

Right now, Pemex has been spending roughly $20 billion or so a year on exploration and production. The CEO of Pemex recently has commented that he would like to take that to $30 billion or $35 billion. But he also believes that the country of Mexico needs about $60 billion annually in investment to stem production declines and to raise production from here...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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