Pemex lays out priorities for 2022 and beyond

Mexican state-owned oil company Pemex has laid out its priorities for the remainder of the administration of President Andrés Manuel López Obrador.

The company’s main goals relate to boosting its refining capacity and ending crude exports, ensuring all Mexico’s output is processed by Pemex, CEO Octavio Romero Oropeza told a press conference.

Other objectives are to boost its fertilizer business, diving deeper into the LPG retail business, and wrestling back control of the domestic fuel sales market through the creation of a new unit to compete with private sector players. All these objectives, together with other priorities, will see the company investing some 388bn pesos (US$18.8bn) in 2022, according to the plan.

During the presentation, the CEO also signaled, for the first time in years, that Pemex was considering opening up a project to an alliance with the private sector. It would involve reviving the Campo Lakach field, where the company invested US$1.3bn in what is a complex deepwater project that was ultimately considered unviable.

According to Romero, by finding a private partner willing to invest an additional US$1.45bn in the project, Pemex could stand to benefit to the tune of US$1.2bn in new revenue that could make up for a significant portion of its previous losses at the site.

Oil production and refining

Pemex is working on maintaining the rate at which it incorporates new oil reserves, Romero said. The company’s reserves have fallen steadily since 2012 from 13.8Bb (billion barrels) to 7Bb in 2018. Now, they sit at 7.4Bb but Pemex expects the figure to drop to 7.1Bb in 2024.

The company expects to produce 1.75Mb/d on average in 2021 and adjusted its forecast for next year to 1.94Mb/d. Pemex hopes that by the end of AMLO’s term in 2024 output will be 2Mb/d, with 128,000b/d coming from partnerships with private players.

About 1Mb/d of Mexico’s oil production is sold abroad to be processed and the country has capacity of 714,000b/d at home but the objective is to process 1.5Mb/d at Mexican-owned refineries next year and 1.9Mb/d, or nearly all production, in 2023.

Romero said that to achieve this, Pemex needs to fully incorporate the Deer Park refinery in Texas and complete the overhaul of the company’s six existing refineries next year. Meanwhile, the jump in 2023 would be explained by the startup of the US$8.9bn Dos Bocas refinery in Tabasco state, supported by the expected completion of the overhaul of the Cangrejera petrochemical complex that same year. From then on, Pemex would cease oil exports altogether, the executive said.

According to the presentation, Pemex expects Deer Park to increase its refining capacity by some 300,000b/d starting next year. The existing six refineries would almost double their crude processing capacity from 714,000b/d in 2021 to 1.2Mb/d in 2022 and 1.3Mb/d in 2023. Once operational, Dos Bocas is expected to add 340,000b/d to the system starting in 2023. 

Pemex also plans to ramp up production of natural gas end-products, including methane, LPG and ethane, from 965Mf3/d in 2021 to 1.8Bf3/d in 2023.