Mexico City — Mexico’s state-owned oil company Petróleos Mexicanos (Pemex) has increased its oil refining output for the first time since President Andrés Manuel López Obrador (AMLO) took office in December 2018, but has also increased its losses in the business.
The company’s refining subsidiary Pemex Transformación Industrial (TRI) refined an average 839,400 barrels per day in April 2022, a level not seen since 2016, but in the first quarter of this year the company’s losses totaled 18.7 billion pesos ($950.1 million)
And the annual figures reinforce the depth of the business’ loss-making, according to the company’s consolidated results.
Pemex TRI’s 2021 net losses totaled 32.15 billion pesos ($1.63 billion), which it attributed to its failure to meet projected production levels amid operating problems, a lack of resources for the ultra-low sulfur gasoline and diesel projects which had no budget allocation for 2022, and in addition to the negative results of the 108-year-old Madero refinery.
The rehabilitation of the country’s six refineries, collectively called the national refining system, carried out at the behest of the Energy Ministry (Sener) under the orders of Energy Minister Rocío Nahle García, has failed to achieve its objective of raising refining capacity to one million barrels of oil per day.
The failure to meet that goal has to do with the high production levels of fuel oil, a highly polluting oil residue with a lower value than the crude it is produced from, due to the lack of a coker plant at the Tula refinery that would allow the company to obtain more gasoline and diesel, and which will not be ready until 2024, according to Pemex CEO Octavio Romero Oropeza.
AMLO’s government outlined an energy policy that included achieving self-sufficiency in gasoline and diesel production - as a means of weaning the country off its dependency on imports - through budgetary support to Pemex to rehabilitate its six refineries, and for the construction of a seventh refinery in Tabasco state, as well as the purchase last December of the Deer Park refinery complex in Texas from Shell, which was the company’s partner in the project.
But the president’s goal has been stymied by record-high oil prices due to the post-pandemic economic recovery, the Russian invasion of Ukraine, and the subsequent sanctions imposed on Russia, one of the three largest crude oil producers in the world, external factors that have forced the Mexican government to delay its goal of halting oil exports, instead choosing to take advantage of the higher revenues that can be reaped amid the high prices.
Pemex pledged to refine 1.5 million barrels of oil per day this year and reduce exports to 435,000 barrels per day, from the current one million barrels per day.
