October 1, 2013 / 8:48 PM / 6 years ago

Maersk bullish on Latin America, eyes Mexico's deep water oil

MEXICO CITY (Reuters) - Danish oil and shipping group A.P. Moller-Maersk (MAERSKb.CO) sees big investment potential in Latin America, including deep water oil projects and ports in Mexico, its chief executive said on Tuesday.

Nils Smedegaard Andersen Group Chief Executive Officer of A.P. Moller-Maersk attends the annual meeting of the World Economic Forum (WEF) in Davos January 26, 2013. REUTERS/Pascal Lauener

In an interview with Reuters, Maersk’s Chief Executive Nils Andersen said the company was closely monitoring Mexico’s efforts to enact a bill to open up the oil industry to more private investment submitted to Congress last month.

“At the moment, we’re discussing deep water drilling. We think there is a big market for that,” said Andersen.

Mexican President Enrique Pena Nieto is hoping to attract big investors to the country to ramp up oil production, which has fallen by around a quarter since 2004.

Oil majors are following the progress of the energy bill closely, and Andersen said his company would wait and see how the legislation turned out before making any commitments.

Still, during a two-day trip to Mexico, Andersen said he had met the country’s economy, transport and energy ministers, as well as the CEO of state oil monopoly Pemex PEMX.UL.

And Andersen was upbeat about Latin America.

“It’s undersupplied with infrastructure. That’s why we’re investing in Peru, that’s why we’re investing in Costa Rica, we’re building in Brazil and would potentially be interested in more ports in Brazil,” Andersen said.

“Latin America as a whole is very interesting, and Mexico within that area is clearly more interesting,” he added.

Andersen cited Mexico’s efforts to open up the oil sector, its competitive labor costs, free trade agreements and close economic ties to the United States as positive factors.


In 2011, Maersk’s ports division APM Terminals announced its successful tender to build and operate a new container terminal at Mexico’s Pacific coast port Lazaro Cardenas.

Construction, which recently started, is valued at $900 million over three phases, the first of which is set to be completed in 2015 and cost $500 million, said Andersen.

“What we are investing in is facilities that will enable Mexico to trade with the rest of the world,” said Andersen.

The first phase of Maersk’s project at Lazaro Cardenas is due to create a capacity of 1.2 million twenty-foot container units (TEUs), the company estimates. While fully expanded, the terminal would reach 4.3 million TEUs, Maersk says.

The chief executive added the Danish company is currently “pursuing” a new container terminal at the major Gulf coast port of Veracruz. “We proposed to the government that we should take an interest in Veracruz,” he said, without giving more details.

The conglomerate’s total Latin America investment and committed capital total about $8 billion, all of which has been pledged over the past five years, Andersen said.

Maersk’s oil units today operate in the oil sector in 10 countries, including Brazil, Venezuela, and more recently, in U.S. territorial waters in the Gulf of Mexico.

Maersk Group has four core businesses - the world’s biggest container shipping company Maersk Line, APM Terminals, oil unit Maersk Oil and offshore drilling company Maersk Drilling.

Reporting by David Alire Garcia and Dave Graham; Editing by Bernard Orr

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