Mexico steadfast on commitment to minimize fuel imports by 2024, officials say

Mexico is firm on its commitment to become self sufficient in the production of fuels by as early as 2024, when state oil company Pemex expects to minimize its imports, high-level officials said March 16.

Mexico expects to produce 1.36 million b/d of fuels in 2024, when its Dos Bocas refinery, currently under construction, becomes fully operational, Pemex CEO Octavio Romero Oropeza said during President Andres Manuel Lopez Obrador's daily press conference.

With that level of output, which also includes production at the Deer Park refinery in Texas that Pemex bought from Shell in 2021, Mexico's imports will be marginal at around 34,000 b/d in 2024, Romero Oropeza said. Imports were 900,000 b/d in 2019, he noted.

In 2023, production of fuels is expected to grow to 1.1 million b/d from 686,000 b/d in 2022 as Dos Bocas begins operations in the second half of the year, Romero Oropeza said. Imports are expected to fall to 232,000 b/d from 598,000 b/d in 2022, he said.

Maintaining the refineries

Energy Secretary Rocio Nahle García said during the press conference that production has benefited from the maintenance program the government has implemented on its six refineries since Lopez Obrador took office in 2018, which is expected to cost the government $3.1 billion.

As part of the program to increase production, Nahle García said Mexico is building two coking plants at the Tula and Salina Cruz refineries of Tula and Salina Cruz. The coking plants will be completed by 2024, although she did not say when they could be in operation. In 2023, refinery runs were expected to grow to roughly 1.2 million b/d, Nahle García said.

S&P Global Commodity Insights analysts have more conservative expectations for refinery runs at 840,000 b/d in 2023 and 855,000 b/d for 2024. S&P Global does not project the Dos Bocas refinery to be operational before 2025's fourth quarter.

Higher production

During the press conference, Romero Oropeza said that government efforts to aid Pemex have yielded positive results in crude production and added that the government remained committed to increase production to 2 million b/d by 2024, from 1.785 million b/d in 2022.

"During the first three months of the year, production averaged 1.875 million b/d, and today's production was 1.915 million b/d," Romero Oropeza said.

Lopez Obrador noted during the press conference that he will dedicate the end of the week to supervising maintenance works at the refineries. Later March 16, the president planned to visit the Madero refinery in Nuevo Leon, and March 17 he will visit the refineries of Dos Bocas and Minatitlan before returning to the capital for a large event March 18 for the 85th anniversary of the nationalization of oil assets in Mexico.