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Mexico's Pemex aims to start importing light crude this year

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Reuters MEXICO CITY
Last Updated : Aug 28 2014 | 4:46 PM IST

By David Alire Garcia and Ana Isabel Martinez

MEXICO CITY (Reuters) - Mexican state-owned oil company Pemex wants to launch light crude oil imports later this year, potentially reaching up to 70,000 barrels per day (bpd) and aimed at boosting refinery output, the head of its commercial arm said.

The imports would mark an abrupt shift from a decades-old devotion to crude oil self-sufficiency in Mexico, long a major exporter to the United States. It also comes after a sweeping energy sector overhaul which seeks to reverse many years of declining output and export volumes.

"Our objective is that (crude imports) will begin this year," said Jose Manuel Carrera, chief executive officer of PMI Comercio Internacional, Pemex's oil trading arm.

His comments are the strongest signals to date on both the timing and potential volumes of light crude imports to Mexico.

Carrera said light crude imports could range between 35,000 bpd and 70,000 bpd, or around 5 to 10 percent of the crude oil each of Mexico's six domestic refineries process.

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"That's a reasonable (volume) to begin with," he added, emphasizing that the amount could vary depending on which Pemex refineries add light crude to their mix.

Mexico, the world's 10th-largest crude oil producer, has very rarely imported the commodity. Still, it must import about half of its gasoline due to ailing refinery output at home.

Carrera said the light crude imports could arrive via a crude swap or a direct import agreement with the United States, depending on specific approval from the U.S. Commerce Department.

He described U.S. crude prices as "very attractive," but he said PMI is also analyzing light crudes from other countries.

While U.S. companies Pioneer Natural Resources and Enterprise Products Partners have secured permission to ship a type of ultralight oil known as condensate to foreign buyers, Carrera all but ruled out the possibility.

"Condensate is not necessarily what Mexico needs. It needs crude," he said.

The United States is enjoying an unprecedented oil boom due in large part to surging shale oil production in places like the Eagle Ford Formation in south Texas, but Carrera said Mexico might not opt to buy U.S. shale oil.

"It could be shale oil or ... it could be conventional American oil," said Carrera, specifically mentioning West Texas Intermediate light crude as a possibility.

Pemex exported a total of 1.02 million bpd of crude oil last month, and about 73 percent, or 744,000 bpd, is shipped to the United States, which is increasingly energy independent.

U.S.-bound crude shipments have fallen 44 percent over the past decade.

Still, Carrera said the bulk of Mexican crude will continue to go to refineries along the U.S. Gulf Coast, and that export volumes to growing Asian export markets China, India and Japan will remain steady through 2015.

(Reporting by David Alire Garcia and Ana Isabel Martinez; Editing by Simon Gardner, Bernard Orr)

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First Published: Aug 28 2014 | 4:33 PM IST

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