PEMEX Expects to Import Crude by 2023

President López Obrador plans Mexico to be gasoline and diesel sufficient by 2024, Nevertheless, PEMEX estimates oil supply deficits as soon as next year.

The state-owned company is anticipating a deficit of 47 Mb/d in 2023 and 97 Mb/d in 2024 for crude supply. According to the NOC, this decrease is due to modifications at its Cangrejera plant, despite oil production expected to jump 14 percent to 2 million b/d by December 2022.

Cangrejera plant´s expected capacity is 133 Mb/d for 2023, and together with the Dos Bocas facility and the Deer Park refinery, a capacity of more than 650 Mb/d is expected.

The NOC aims to increase refinery operation rates up to 86 percent in two years, an ambitious goal considering that in 2016 these placed above 50 percent. According to PEMEX website, the six existing refineries averaged 44 percent of capacity last year.

PEMEX aims to halt all crude oil exports and imports entirely and has already started to do so. For instance, the NOC reduced crude exports to , their third largest market. In the first two months of the year, Mexico programmed a crude shipment reducing exports from the 98Mb/d in 2021 to 15Mb/d. Nonetheless, it will experience a shortage of crude oil and it seems the country will have to start importing crude to meet its national demand. 

Nymia Alemida, Moody’s Investor Service analyst, said that PEMEX does not have the necessary oil volumes to meet the country’s fuel consumption and will be forced to start importing crude again.

Last time Mexico imported oil was in 2018 under the Enrique Peña Nieto’s administration, this action was heavily criticized by López Obrador and deemed as “an example of the great failure of neo-liberal economic policies in the last 30 years.”

Deer Park and Dos Bocas

PEMEX signed a long-term agreement with Shell as part of its purchase of Deer Park. This makes Shell the provider of most of the crude oil that the facility expects to process in the next 15 years, according to a report from Reuters. The agreement dictates that Shell will supply approximately 200 Mb/d of crude to Deer Park and a PEMEX unit will supply approximately 115 Mb/d, which will place the refinery close to its full processing capacity of 340 Mb/d. 

The government’s flagship mega-refinery Dos Bocas is expected to start refining next year. Nevertheless, the project will reportedly cost 40 percent more than the previous estimation and will likely not be finished this year, which was the government’s original deadline. Analysts say the starting price tag has increased significantly and now stands at US$12.5 billion.