Mexico targets first-ever imports of US light crude

Mexico City, Jan 9 (IANS/EFE) Mexico eyes first-ever sustained imports of light crude from the US, with the Mexican state energy giant Petroleos Mexicanos (Pemex) proposing an oil swap with the US.

Pemex said in a statement Thursday that it made the proposal to the US commerce department's Bureau of Industry and Security, which is studying the viability of the transaction.

Under the proposal, Mexico would import up to 100,000 barrels per day (bpd) of light crude and condensates to mix with its own heavier crude at Pemex's Salamanca, Tula and Salina Cruz refineries.

The company also said that it would ship heavy crude to the US as part of the swap, but clarified that the transaction "does not represent an additional commitment to the 803,000 barrels of Mexican crude that were exported daily, on an average, to the US last year".

Pemex said the proposal was made amid a "significant increase in light crude production in the US," which has experienced a shale boom in recent years.

The main benefits for Mexico would be to achieve greater gasoline and diesel production, smaller output of fuel oil and petroleum products with high sulfur content, as well as better use of the domestic refineries' installed capacities, Pemex said.

US Commerce Secretary, Penny Pritzker and Mexico's ambassador to the US, Eduardo Medina Mora, have told the media this week that discussions on a potential oil swap were going on.

"This is to optimise the operation of our refineries, having less production of by-products that are not particularly attractive in international markets, nor necessary in the Mexican market," Mora said Wednesday.

Imports of US light crude would occur within the framework of a constitutional overhaul that ended Pemex's 75-year-old monopoly and opened up Mexico's energy sector to private investment.

Mexico, which is a net importer of refined petroleum products, is the world's 10th largest oil producer and third-leading supplier of crude to the US after Canada and Saudi Arabia.

Mexican oil production has fallen sharply over the past decade and currently stands at 2.5 million bpd, down from a record high of 3.38 million bpd in 2004.

--IANS/EFE

ddb/