Page 8 - AsianOil Week 06 2022

AsianOil SOUTH ASIA AsianOil

Mexican oil export

cuts already

affecting India

PERFORMANCE MEXICO’S national oil company (NOC) Pemex
has reportedly slashed crude exports to India
since the beginning of the year, in an apparent
move to uphold its previously announced goal
of making more feedstock available to domestic
refiners.
Sources familiar with the matter told Reuters
earlier this week that state-controlled Pemex was
taking deliberate steps to reduce the volume of
crude delivered to Indian refiners. They noted
that the NOC was scheduled to send only one
cargo of oil to an Indian buyer in the first two
months of 2022. This will cut the total amount
exported to India to 15,000 barrels per day (bpd)
for the January-February period, down by 84.7%
on the figure of 98,000 bpd posted in the same
interval of 2021, they said.
One of the sources remarked that Pemex was
not only putting existing clients on hold but was
also making no attempts to attract new custom-
ers. “Indian refiners that buy Mexican crudes
every month are being called to notify them
of volume cuts in 2022. Pemex has also turned
down requests by refiners trying to sign new
contracts,” he told Reuters.
India has been a major market for Mexican
crude exports. Refinitiv Eikon data cited by
Reuters show that Indian refiners purchased a
total of 132,500 bpd of oil from Pemex last year,
equivalent to about 7.6% of the country’s total
production of 1.736mn bpd. Indian Oil Corp.
Indian refiners (IOC), HPCL-Mittal Energy Ltd (HMEL) and and European buyers were likely to see much
Reliance Industries have been among the biggest smaller reductions.
purchased a total buyers of Isthmus and Maya grade crudes. Reducing exports is not a trifling matter.
All three are likely to see Mexican imports Mexico has been exporting at least 1mn bpd of
of 132,500 bpd drop sharply this year. Reuters’ sources reported crude oil since the early 1980s, and the 2021 fig-

of oil from Pemex that Pemex had already reduced shipments to ure was no exception, coming in at a bit more
HMEL and Reliance, and one source said he than 1mn bpd. President Lopez Obrador’s plan
last year. expected to see IOC take delivery of just 22,000 calls for cutting that figure down by more than
bpd of Mexican oil in 2022, down from 40,000 60% in 2022 and then bringing it all the way
bpd last year. down to zero by the end of the following year.
Pemex’s CEO Octavio Romero Oropeza Pemex has already decided what to do with
told reporters in late December that his com- the additional barrels of crude oil. It intends to
pany intended to cut exports to 435,000 bpd in deliver these volumes to its refineries in order
2022 and then halt exports altogether over the to maximise fuel output, increase domestic fuel
course of 2023, as requested by President Andres supplies and eliminate dependence on imported
Manuel Lopez Obrador. Bloomberg commented fuels. The feedstock will go to Pemex’s six exist-
at the time that this shift was widely anticipated ing plants, which have been operating far below
to have a bigger impact on Asia, which typi- their full design capacity of 1.6mn bpd for many
cally absorbs about 25% of Mexico’s total crude years, as well as the newly acquired Deer Park
exports, than on North America, which is refinery in Texas. It will also eventually go to the
Pemex’s primary export market. It also said that Dos Bocas refinery, a 340,000 bpd facility now
the most significant cuts would probably affect under construction in Lopez Obrador’s home
customers in South Korea and India, while US state of Tabasco.™

P8 www. NEWSBASE .com Week 06 11•February•2022