Mexico’s Refineries Hit 12-Month LowBy Peter Appleby | Mon, 03/30/2020 - 13:30
Monthly production levels of the six refineries that make up Mexico’s National Refining System (SNR) dropped to an average of 163,898b/d in February 2020, the lowest seen since February 2019, reports El Economista.
February’s poor results mark a period of 12-months, between February 2019 to February 2020, during which the SNR’s average production fell by some 2 percent to 181,293b/d. This gradual slide followed a 17 percent decrease in February 2019 alone, the worst month for production from refineries since records began.
Though untimely, this news is not unexpected. The SNR’s production has underwhelmed for a number of years, with average production dropping as low as just 30 percent of the system’s installed capacity. Now, the entire refining system is undergoing maintenance work as part of its redevelopment parallel to the construction of the Dos Bocas refinery in Tabasco. Modernization works taking place across the refineries in Cadereyta, Madero, Minatitlan, Salamanca, Salina Cruz and Tula began in the second half of last year and are essential to the future health of Mexico’s refining capacity but, as predicted by the Ministry of Energy, are impacting each refinery’s performance.
Figures on refining production come after a few turbulent weeks for PEMEX. Caught between a price war and the worldwide drop in demand for oil products due to the COVID-19 pandemic, the company last week had its global scale foreign currency and local currency ratings reduced by credit rating agency, Standard & Poor’s. Falling demand has seen the Maya crude value fall from US$41.85 per barrel on March 2 to US$13.01 per barrel on Friday of last week, just over a dollar less than PEMEX’s average production cost per barrel, as reported by El Economista.
Mexico’s oil and gas industry is awaiting news of the federal government’s plans for private investment into PEMEX and CFE, the announcement of which was touted at the president’s Friday morning conference. What this plan may consist of, considering the administration’s wariness of working with the private sector, remains to be seen. But at the moment, PEMEX could do with a helping hand.