18 August 2014, News Wires – Mexico’s state-owned oil company, Pemex, may abandon a decades-old devotion to self-sufficiency in crude oil, entering talks with US companies about importing light crude from its northern neighbor, where output is booming.
Chief executive Emilio Lozoya said in an interview late on Thursday that Pemex could consider imports of light crude from the US in the next few months, to generate more value from the Mexico’s six domestic refineries, Reuters reported.
Lozoya said importing light crude from the United States was “a very good idea” that Pemex was analysing, noting that it could help the company’s refining unit boost output of products it is often forced to import, including gasoline and diesel.
“We are in negotiations with the United States government and of course US companies,” he added, declining to name specific companies or likely volumes to be imported.
Mexico has very rarely imported crude, most recently in the late 1990s, instead preferring a stubborn self-sufficiency even as overall domestic production declined and the country’s oil mix has tilted toward harder-to-refine heavy crudes.
The US has since the 1970s essentially banned exports of most crude but in recent months has allowed for sales of some cargoes of minimally processed condensate.
“This makes all the sense in the world,” said Luis Miguel Labardini, an oil analyst with Mexico City-based energy consultancy Marcos y Asociados, adding crude imports from the U.S. would mark a paradigm shift for the Mexican oil company.
“There has been a very big prejudice within Pemex to import crude,” he said, pointing to an opportunity for Pemex given booming light crude output in the United States, particularly in the Eagle Ford Formation in Texas.
Analysts have said that light crude imports from the United States could increase gradually to 200,000 barrels per day over the course of the next year.
Pemex’s six domestic plants are expected to refine an average of 1.25 million barrels per day this year, or about 20% below their combined capacity of 1.58 million bpd.