Pemex sees crude refining up more than 6 percent in 2016

Mexican state-run oil company Pemex expects to process 6.3 percent more crude oil this year, as it resolves problems at refineries that forced crude runs to a record low in 2015.

The company, which operates six domestic refineries, will refine 1.134 million barrels per day (bpd) this year, compared with 1.066 million bpd in 2015, according to refining documents seen by Reuters.

Last year, Pemex processed its lowest amount of crude in at least a quarter century, as plant outages and other inefficiencies battered margins.

If Pemex refines more crude domestically, it would lessen Mexico's need for gasoline imports, which have grown by nearly a fifth over the past three years.

Mexico is currently forced to import more than half of its gasoline demand.

In an emailed response to questions, the company said this year's uptick was due to fixes at its hydro-desulfurization and gasoline reformer units as well as the "stabilization" of its Cadereyta refinery following adjustments to its low-sulfur diesel units.

In 2016, the company expects to achieve a utilization rate of 72 percent, up from 68 percent last year, according to Reuters calculations based on the Pemex documents dated Feb. 5.

In comparison, refiners in the United States have a utilization rate of 87 percent, while in Brazil the rate is 81 percent and in Colombia 79 percent, according to February data from Houston-based consultancy Wood Mackenzie.

Pemex has a total refining capacity of 1.576 million bpd.

The company's refining business has for decades been protected by its monopoly status and government-set fuel prices, but a sweeping energy overhaul will soon force it to compete with private firms to hold its share of demand from Mexico's growing population.

Pemex's Tula refinery, the company's second biggest, will see crude runs rise about 10 percent to average about 261,000 bpd this year.

Meanwhile, Pemex's Madero refinery, its smallest, is expected to see crude processing dip nearly 11 percent to just 115,500 bpd. The reduced runs at the facility are due to maintenance at its alkylation and U-502 units scheduled for June, Pemex said in an email.

The company did not say how more than US$5 billion in budget cuts this year will affect this year's crude run estimates.

Like nearly all oil companies, Pemex has sharply reduced spending due to a more than 70 percent drop in crude prices over the past couple years.

Pemex plans reconfigurations this year at its Madero and Cadereyta refineries, including new diesel hydro-desulfurization units as well as the installation of sliding valves designed to boost coking capacity.

Finalized in 2014, Mexico's energy reform ended Pemex's monopoly and aims to boost lagging crude output, which dipped 7 percent last year, by luring new private producers.

The reform will permit non-Pemex companies to distribute imported gasoline starting in April, and then allow private firms to refine crude and sell fuels at market prices in 2018.