Pemex Sees 44% Drop in Oil Exports

Mexico’s Pemex booked a 44% decline in crude oil exports last month, to some 530,000 barrels daily, which was the lowest export rate in decades, Reuters said in a report.

For context, the average daily rate of exports by Pemex last year stood at about 811,000 barrels. The January average, on the other hand, was the lowest since 1990. Crude oil exports to the Americas fell by 36% in January to some 321,000 barrels daily. The biggest American market for Pemex crude is the United States, where Bloomberg reported earlier this month that refiners have been shunning Mexican crude due to excessive water content.

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This was concerning, Bloomberg said in its report, because Mexico is the second-biggest supplier of crude to Gulf Coast refiners after Canada. Financial woes at Pemex may have a role to play in the situation as the Mexican state energy major is having trouble paying outstanding bills of some $20 billion to suppliers of chemicals and equipment for reducing the water content in its crude oil. Pemex’s chief executive Victor Rodriguez acknowledged the problem, saying it was temporary and involved excessive salt content in the crude.

Despite these quality problems and the dip in exports, Pemex has the stated intention of boosting its oil and gas production—by expanding its reserves through more active exploration with a focus on deepwater deposits. The decision follows a steady decline over the years despite successive governments’ efforts to reverse it. According to Pemex, the chief reason for the decline in production was depletion at mature fields and new discoveries falling short of expectations.

In January, the Mexican state company’s production of crude oil and condensates averaged 1.62 million barrels daily, which was 12% lower than the average for January 2023. Gasoline production increased, however, by 23%.

By Irina Slav for Oilprice.com

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