Mexico’s energy industry strategy will be overhauled if the frontrunner for the next presidential term, Andres Manuel Lopez Obrador, wins the July election, his senior energy adviser said in an interview with Reuters.
Rocio Nahle, who is the most likely Energy Minister of the future cabinet if Obrador wins, also said that the leftist candidate is not against foreign energy investment in Mexico. Even so, the contracts signed with international oil companies by the current government will be scrupulously reviewed.
What Obrador seems to be opposed to is sending crude oil abroad. In fact, the Obrador government would try to put an end to all crude oil exports within three years of coming into office, focusing instead on refined products.
“In a three-year period, at the latest, we need to try to consume our own fuels and not depend on foreign gasoline,” Nahle said. This would be bad for U.S. refiners, who export the biggest portion of their production to Mexico. In the last few years, Reuters notes, Mexican imports of gasoline and diesel have risen to more than 800,000 bpd, representing over 66 percent of domestic demand.
This could be the reason why Obrador’s team is seeking to change the focus of the Mexican energy industry to achieve greater self-sufficiency in the fuel department. Yet exports are also a priority. Now, Pemex exports most of its crude to the U.S. Gulf Coast refineries, but also some to Asia and Europe. Last year, the average daily export rate was 1.17 million bpd.
Fuel exports would be more lucrative, Nahle says, so the likely future government of Mexico is devising plans to expand the processing capacity of Pemex’s six refineries and build one or two more, to add between 300,000 bpd and 600,000 bpd to the existing refining capacity of the country, which is 1.6 million bpd of crude.
By Irina Slav for Oilprice.com
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