Mexico Struggles to Achieve Self-Sufficiency in Fossil FuelsBy María José Goytia | Fri, 07/22/2022 - 09:16
Mexico is straining to achieve energy self-sufficiency in the near future, as fuel imports continue to surpass exports. Moreover, PEMEX suppliers are losing money after the state-owned surprisingly carried out a debt swap. Meanwhile, ECLAC published its latest report on Mexico’s natural gas production.
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Mexico continues to distance itself from the goal of becoming energy self-sufficient. Even though energy sovereignty is one of the pillars of the López Obrador administration, Mexico faces a difficult reality amid a rising demand for oil, which results in increased fuel imports because the refining system is not yet up to scratch. This month, PEMEX registered a decrease of 4.5 percent in crude oil exports. Meanwhile, the state-owned company’s imports have increased by 17 percent for gasoline and 34 percent for diesel.
PEMEX's suppliers are being hit with heavy losses after the state-owned oil company entered into a debt swap instead of paying its maturing obligations with cash. Losses are piling up for companies that had little choice but to accept new bonds rather than cash payments, as part of a US$2 billion refinancing of PEMEX's commercial debt in early June.
The Economic Commission for Latin America and the Caribbean (ECLAC) published its recent study on natural gas in Mexico. According to the international organization's estimates, Mexico will only be able to supply 10 percent of its total demand by 2030 if the projected economic growth and the drop in natural gas production continue. ECLAC also warns about insufficient storage infrastructure and excessive dependence on the US for gas imports.
A simulation carried out by the consulting firm PETROIntelligence highlights that with the incorporation of the gasoline and diesel production from Deer Park and Dos Bocas into Mexico's refining system, the country will achieve a surplus in the production of fuels, which could even be exported. Alejandro Montufar, CEO, PETROIntelligence, pointed out that this scenario is based on the data available so far.
On the first day of the Mexican Oil Congress (CMP), industry authorities such as PEMEX CEO Octavio Romero Oropeza and Carlos Pascual, Senior Vice President, S&P Global, discussed topics such as the designed renaissance of PEMEX and the untapped potential of exporting liquefied natural gas (LNG) to Asia.
In June, CNH reported that private companies in Mexico had reached a historic production level of 100Mb/d. As investments in the Mexican energy industry have continued to increase, members of the Mexican Association of Hydrocarbon Companies (AMEXHI) are utilizing this momentum to announce that they are looking to foster the production of natural gas, too, as the country has had to heavily rely on the US to supply the resource.