Regards,

Chip Schneider
EB2852
x3-1789
----- Forwarded by Chip Schneider/NA/Enron on 01/25/2001 08:46 AM -----

	webmaster@cera.com
	01/24/2001 10:28 PM
		 
		 To: messages@cera.com
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		 Subject: The Pemex Natural Gas Price Hedge: Market Savior Or Monopolistic 
Strategy? - CERA Insight


Mexico Energy Service Insight*Pemex Natural Gas Price Hedging Plan

Pemex has offered Mexican industrials a new hedging plan to mitigate the 
impact 
of high natural gas prices. The hedge consists of a three-year take-or-pay 
contract with Pemex that will fix the price of natural gas at $4.00 per 
MMBtu. 
The hedge will provide industry short-term price relief and will increase 
awareness of hedging instruments in Mexico.

However, implementing this price-hedging scheme will have many significant 
ramifications for the Mexican natural gas market. It will

* raise questions about future government intervention when prices fall

* affect future market development

* possibly reduce incentives to increase production in Mexico

**end**

*********************************************************
Come Shoot the Rapids with us at CERAWeek2001, "Shooting the Rapids: 
Strategies and Risks for the Energy Future" in Houston, February 12-16, 
2001!  
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*********************************************************


E-mail Category: Insight                                           
CERA Knowledge Area(s): Mexico Energy, 

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