Mexico's state-owned oil company Pemex plans to start importing up to 100,000 barrels of light crude daily, ending decades of oil self-sufficiency as declining domestic production meets rising energy demand.
Reuters quotes Pemex chief executive Carlos Trevino as saying, "A hundred thousand barrels (per day) more or less is what we're going to import to process and incorporate into our refineries, mostly at Salina Cruz. We're going to mix it with Mexican crude, with some of our mix to be able to process at the levels we want to get back to in refining. We should be around 800,000 barrels (per day of refining in the country's entire system) by the end of the year."
Pemex has six refineries with a combined capacity of 1.6 million barrels daily. This year, however, due to operational problems and outages, as well as Pemex's focus on generating as much revenue from its crude as it can, which means exporting more, these have been operating at 40 percent of this capacity.
The oil imports will begin in late October and continue at least until late November, with the most likely source of the feedstock Mexico's neighbor to the North. At the same time, Pemex still must tackle declining local production: Trevino told Reuters the company would not be able to meet its production target for this year, which was 1.95 million bpd. The CEO said the actual output will be "considerably below" the target.
Related: Don't Underestimate The Trade War Impact On Oil Demand
On a positive note, the executive said he was certain there will be an oil and gas auction next February. The auction was scheduled by the outgoing government of Enrique Pena-Nieto, but President-elect Andres Manuel Lopez Obrador has canceled all auctions until a review of contracts signed under previous ones are reviewed.
Yet even with new tenders, Pemex is in for another year of production declines, Trevino also said. What's more, it's questionable how many more tenders there will be: Obrador said he will give Pemex the powers to select its partners rather than have them picked by the national hydrocarbons commission in tenders.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
Comments