Mexico receives license to import US oil
Date
10/29/2015 5:14:20 AM
(MENAFN- The Journal Of Turkish Weekly) State-owned oil company expected to import as much as 75000 barrels per day of US crude
Mexico’s state-owned oil company said Wednesday that it has received a license from the U.S. to import light crude in exchange for heavier Mexican crude.
Except for Canada the U.S. government has not issued a similar approval in 40 years – possibly a step in striking down a ban on exporting domestic oil that was enacted in the wake of an Arab oil embargo in the 1970’s.
The one-year license will allow Pemex to import as much as 75000 barrels a day of American light crude in order to process it in its national refineries.
The lighter oil will help Mexican refineries produce more premium fuels according to Pemex.
“Among the benefits expected for Mexico from this trade of oil are integrating the energy markets in North America strengthening trade relations between Mexico and the U.S. improving logistic efficiency by reducing transportation costs through the use of maritime transportation to Mexico and maximizing refining margins” Pemex said in a statement.
The government here approved historic energy reforms last year that allowed its refiners to import oil ending a 75-year-state oil monopoly.
Pemex first asked the U.S. in January for an exchange of 100000 barrels per day – about 1 percent of current U.S. output. The company said Wednesday that Mexico reduced its original offer in order to meet national refineries’ needs.
The head of the company’s corporate partnerships and new business Jose Manuel Carrera said Mexico could import up to 27 million barrels during the agreement to process it in refineries in Salamanca Tula and Salina Cruz.
"The Mexican crude we would no longer be processing obviously that would be destined for export in markets where it has higher value where it can be processed more efficiently" Carrera said.
American refiners will continue to process heavy Mexican oil – better suited to their needs than the light crude coming from the shale regions of Texas and North Dakota.
Energy producers including Exxon Mobil Corp. ConocoPhillips and Pioneer Natural Resources have called for an end of the restriction of U.S. crude exports arguing that the ban forced them to sell oil issued during the shale boom at below global market rates.
The exchange came at a good time for Pemex that has been reeling from low crude prices and output. Pemex announced Wednesday a deficit for 12 straight quarters.
Pemex lost 168 billion pesos ($10 billion) in the third quarter and 353 billion pesos ($21 billion) in 2015.
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