Oil Prices Buoyant; Wood SucceedsBy MBN Staff | Thu, 01/07/2021 - 17:08
News from the OPEC+ meeting was met by a jump in oil prices that have remained high despite political unrest in the US. Wood’s Antonio Villaluenga shared his input on why the company has performed so well despite such a difficult year, as well as Wood’s growing project base in Mexico. Fernando Flores, Director General of Green Energy Fuels/SIFRAP, explained the case for self-service at gas stations.
All this in The Week in Oil and Gas.
Earlier in the week OPEC+ members reconvened to make plans for the first months of the year. The resurgence of the COVID-19 pandemic in many European countries had drowned the hope that the beginning of vaccination campaigns brought just weeks earlier. But Saudi Arabia’s voluntary cut of 1MMb/d in February and March gave oil prices enough of a kick for WTI to break the US$50 per barrel since February.
Mexico’s production cap of 1.753MMb/d means that the country will not need to cut any output as it produced, according to CNH’s most recent figures, over 100Mb/d less than the cap in October.
Though figures are always generally delayed, the Mexican crude basket also enjoyed an increase in value, jumping almost US$3/b by Wednesday night.
Antonio Villaluenga, Manager at engineering and consultancy company Wood, told MBN in an interview this week that the company’s strong performance during the pandemic was due to strategic decisions it took years ago. Due to the company’s diversification in its service portfolio, it no longer relied so heavily on investments made in the upstream alone and, as oil dipped, the company was able to turn its efforts to other segments of the value chain.
The company is active across all segments, and is particularly involved in storage said Villaluenga. “Activity in fuel terminals has also increased considerably over the last year and Wood is consistently providing expertise and developing storage terminals for clients in Mexico,” he explained.
Expert Contributor Fernando Flores, Director General of Green Energy Fuels/SIFRAP, explains how self-service at gas stations could be a potential ally for gas consumption recovery during the post-pandemic era and a way for the sector to reduce the likelihood of fuel theft at the pump.
Flores notes that since the enactment of the Energy Reform, several regulations governing the sector have come into force and have attempted to fix fraudulent pumps, when a consumer pays for a certain liter volume but actually does not receive the full amount. He points out that stations that work within the margin of the law can still make up a huge profit by not filling the exact amount requested by the consumer.
“The law allows a service station a margin of error of 1.4 percent of the supplied fuel. For example, a truck driver who pumps 1,000L of Diesel could receive only 986 liters, which is within the margin of error outlined in the law. Considering the price of fuel at the moment, which is on average MX$18.30 at a gas station, this user would be legally overpaying more than MX$256.20 per load. A gas station that sells 2 million L per month could be making an annual profit by not delivering a complete liter of approximately MX$6 million a year, directly impacting the economic standing of the end user.”
Self-service pumping offers peace of mind for the individual consumer and a more efficient, reliable retail sector, he says.