Mexico reaches historic plummet in oil production

In October, fuel production reached its lowest level since 1992, after the six refineries operated barely had the capacity to process 179,000 bpd
Minatitlan refinery in southeast Mexico – Photo: EFE
25/11/2017
12:24
Noé Cruz Serrano
Mexico City
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Mexico's National Refining System (Sistema Nacional de Refinación abbreviated SNR) is facing its worst crisis, having found it necessary to import fuel in such an extent that it has generated a deficit in the oil balance for USD$3.449 billion.

In October, oil production reached its lowest level since 1992, after the six refineries operated by Mexico's State Oil Company (Petróleos Mexicanos abbreviated Pemex) through Industrial Transformation (Transformación Industrial abbreviated TRI) barely had the capacity to process 179,000 barrels per day (bpd), the equivalent to only two of every ten liters that the national market demanded in that month.

Since March, when the highest level of production for 2017 was recorded, with 335,000 bpd, oil production plummeted 46.4% at the end of last month.

The 179,000 bpd meet only the daily needs of Mexico City, State of Mexico, Veracruz, and Colima.

According to Petroleum Indicators of Pemex, the Mexican state oil company had to resort to the international market to import gasoline and diesel, mainly from the United States. The shipments for 547,000 bpd and 250,000 bpd respectively, have required the disbursement of USD$ 18.741 billion in the first 10 months of the year.

These imports exceed the value of crude oil exports made between January 1 and October 31, which represented revenues for Mexico for USD$ 15,409 million.

Mexico’s crude oil production has been declining for over a decade, which has caused imports of refined fuels to nearly double over the same period of time, according to data from Mexico's Ministry of Energy (Secretaría de Energía abbreviated Sener).

In October, Pemex produced about 1,902,000 oil bpd, that is, 118,000 fewer barrels than in January.

Of that volume, the Federal Government decided to export 1,342,000 bpd, that is, seven out of every ten barrels extracted.

The remaining 30% (560,000 bpd) was allocated to the SNR, which implies that the refineries of Minatitlán, Salamanca, Madero, Salina Cruz, Cadereyta, and Tula worked at 41.1% of their capacity in October.

The six refineries operating in the country processed up to 1,360,000 bpd in July 2004.

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