MOSCOW (MRC) -- Pemex will keep oil exports close to 1 MMbpd through much of 2022, according to people familiar with the matter, despite plans to slash them to refine more crude domestically, reported Reuters.
In late December Pemex said it would more than halve exports of crude to 435,000 bpd this year and reduce them to nil in 2023 as part of President Andres Manuel Lopez Obrador's self-sufficiency drive to end imports of gasoline.
The 2022 target rested on Pemex more than doubling refining output to over 1.5 MMbpd from about 714,000 bpd last year.
But that target is unlikely to be met, the sources said.
Lopez Obrador himself said this week that he was holding talks with the heads of Mexico's refineries as the price of crude oil has surged to its highest levels since 2008 on market tensions stemming from the war in Ukraine.
"We're defining a strategy on the basis that the price of crude is rising, and we're revamping refineries," Lopez Obrador said, without giving details of revised targets.
The president's office did not reply to a request for comment on whether the government now planned to export more crude than Pemex had projected in December. Neither Pemex nor the energy ministry replied to requests for comment.
The sources said exports will now be higher than Pemex forecast, due to surging oil prices and slow progress in boosting refining capacity. The federal budget predicts the company should produce over 1.8 MMbpd of crude this year.
"Last year's export levels will be maintained," a Pemex source with knowledge of planning told Reuters, putting it at between 1 MM and 1.1 MMbpd. Crude exports from Mexico were just over 1 MMbpd in 2021, according to Pemex.
Crude exports fell to 832,000 bpd in January, the lowest level in decades, which the source said was due to poor weather in the Gulf of Mexico. Preliminary data for February showed exports climbing to almost 950,000 bpd, the source added.
Shortfalls in processing capacity mean that more unrefined crude is sold abroad, the source noted.
Mexican refining output averaged some 712,00 bpd last year, and though it reached almost 800,000 bpd in January, a level it should stay close to through July, the source added.
Pemex said in February that processing would average 900,000 bpd this year, rising in the second half of 2022.
A second official source put crude exports at just under 1 MMbpd in 2022, in line with federal budget forecasts. Exports could be above 1 MM if two refineries are halted for repairs to improve their performance, the source added.
As MRC informed before, Pemex has sharply reduced crude exports to India, the third largest market for its oil, amid preparations for a new refinery expected to absorb more of its output. Petroleos Mexicanos in December said it would cut crude exports this year and could suspend them altogether in 2023 as the company works to meet the government's target of refining all of its oil domestically.
We remind that n late January, 2022, Pemex signed a long-term crude supply contract with Royal Dutch Shell Plc as part of its acquisition of the Deer Park refinery in Texas. Pemex and Shell in May, 2021, announced the transaction, which is worth almost USD600 MM and will make the Mexican firm the sole owner of the refinery near Houston. The facility has capacity to process 340,000 bpd. Shell will supply about 200,000 bpd of foreign and US crude to the plant for at least 15 years.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC''s ScanPlast report, Russia's estimated PE consumption totalled 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas shipments of PP random copolymers decreased significantly.