Mexico’s state-owned energy company, Pemex, has instructed its trading unit to suspend up to 436,000 barrels per day (bpd) of crude oil exports this month in preparation for processing domestic oil at the new Dos Bocas refinery, according to an internal document obtained by Reuters. The Dos Bocas refinery, situated in Tabasco state, is slated to commence gasoline and diesel production in the first quarter, as announced earlier this year by President Andres Manuel Lopez Obrador’s administration.
The refinery, which has faced delays and exceeded its budget, forms part of Lopez Obrador’s strategy to reduce Mexico’s reliance on costly gasoline and diesel imports. With Pemex reporting a historic low in crude oil production in February, the company faces constraints in supplying its six operational local refineries. Consequently, Pemex must choose between refining crude domestically or exporting it due to limited resources.
The export cancellations will impact Mexico’s key crude varieties, including Maya, Isthmus, and Olmeca. The reduction in exports is anticipated to affect term contract clients in Europe, the United States, and Asia. While the availability of Maya crude has been dwindling, it is unlikely to be resolved promptly, according to sources familiar with the matter. Mexico’s energy ministry projects that the Dos Bocas refinery will process an average of 178,600 bpd of crude oil this year.
Despite operational challenges, the refinery has yet to commence fuel production. The ministry forecasts a surge in domestic crude processing from 713,300 bpd in 2023 to an average of 1.04 million bpd in 2024. Pemex CEO Octavio Romero aims for local refineries, including Dos Bocas, to collectively process 1.7 million bpd by year-end.