Mexico City — Mexico expects an average price of $60 per barrel for its crude oil exports, as well as an average crude production of 1.9 million barrels per day (bpd) for 2022, as state-owned Pemex struggles to increase output, a government source told Reuters.
The preliminary forecasts are being used by the finance ministry to calculate part of the income for next year’s fiscal budget, which should be delivered to Congress no later than September 8. The forecasts may be tweaked by lawmakers.
The source, who is not authorized to speak on the matter and requested anonymity, added that the preliminary forecast also projects next year’s crude oil exports at 1.1 million bpd.
Oil export sales are a major source of Mexico’s government revenue.
“The macroeconomic forecasts may vary slightly, but that’s what is being considered so far by the finance ministry,” the source said.
Exports of Pemex’s flagship Maya heavy crude and lighter Isthmus grade averaged 1.02 million bpd in the first seven months of 2021, according to figures from the company.
The finance ministry and Pemex declined to comment.
Prices for Maya crude delivered in August on the U.S. Gulf Coast are around $64 per barrel.
The government’s $60 per barrel forecast for 2022 is significantly higher than the $42.1 in this year’s fiscal budget.
Crude prices rebounded earlier this year, but new coronavirus outbreaks fueled by the Delta variant are raising concerns about the strength of the global economic recovery, affecting demand for oil and other commodities.
The Mexican government’s oil price forecast is also used by the finance ministry for its oil hedge, an insurance program designed to safeguard oil revenue, which has cost between $1.0 billion and $1.2 billion annually in recent years.
During the first half of this year, Pemex produced an average of about 1.7 million bpd, according to company data, considerably lower than the government’s 1.9 bpd forecast for next year.
The state-owned company is betting onshore extraction from recent finds will bring new streams of production online quickly.
The company has struggled for years to maintain production, which has progressively declined from a peak of 3.38 million bpd in 2004.
Pemex has previously said it expects to end this year with production of 1.8 million bpd and reach 1.97 million bpd in 2022, according to the firm’s most recent estimate that slightly scaled back a previous target of hitting 2.0 million bpd by the end of this year.
- Reuters (Reporting by Ana Isabel Martinez, Additional reporting by Marianna Parraga; Writing by Anthony Esposito; Editing by Lincoln Feast)