Pemex refineries at record-low throughput
OREANDA-NEWS. September 06, 2016. Mexico's state-run Pemex is processing a record-low volume of crude at its refineries amid a budget squeeze, declining oil production and operational problems.
Pemex processed 929,000 b/d at its six domestic refineries in July, down 8.8pc from June. The last time crude processing sank below 1mn b/d was in November 2010, when the refineries ran an average of 983,000 b/d, energy ministry data shows.
August data is not yet finalized, but preliminary information from Pemex's upstream division shows that the company supplied only 840,000 b/d to its refineries on 1-28 August, down from 1.1mn b/d in the full month of August 2015.
Most of the July decline in crude processing came from the 210,000 b/d Cadereyta and 246,000 b/d Minatitlan refineries, where throughout dropped by 38pc and 24pc, respectively, compared with June.
"Budget restrictions have reached a point where they limit the acquisition of certain chemicals necessary for catalytic reactions or water treatment," a Pemex executive familiar with the situation told Argus. "This has led to the shutting down of some units, as in Cadereyta…It's hard to see how this will change in the rest of the year. It will be a very difficult few months."
Located in Nuevo Le?n, Cadereyta was suspended for several days in July because of a shortage of water from the drought-stricken Ramos river. In July the facility produced 28,667 b/d of gasoline, 44.4pc less than in the previous month, and 33,340 b/d of diesel, down 32.4pc.
The diminished throughput coincides with record imports. In July, Pemex's gasoline imports spiked more than 15pc to 554,800 b/d, compared to July 2015.
In the same month, Pemex produced 308,000 b/d of gasoline, down 19pc from a year earlier.
Most of Pemex?s plans to reconfigure its refineries to produce ultra-low sulfur diesel, and more ambitious expansion campaigns, have been shelved or postponed indefinitely.
Faced with limited capital and the proximity of more competitive refineries on the US Gulf coast, Pemex appears more likely to focus upstream as it adjusts to losing its industry monopoly under a 2014 energy reform. But it is not clear if the company will actually mothball its least profitable refineries, as the economics appear to dictate.
Pemex reported a second quarter 2016 loss of 83.5bn pesos (\\$4.4bn), broadly similar to the financial result in the same quarter of 2015. Earlier this year, Pemex weathered a 100bn peso (\\$5.3bn) cut in its 2016 budget, the second consecutive budget reduction.
The company produced 2.157mn b/d of crude in July, down by 5pc from a year earlier.