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RE: Mexico mulls first Crude Import decades

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Charles Randall

Here is news article on Mexico considering crude imports for first time in decades. The conclusion is drawn by Reuters reviewing Pemex’s long range plan 2010-2024 business plan that states it as option for improving econmics. Reuters is quick to point out it is only option & that Brazil’s Petrobras has done similar crude swap-outs as well. Pemex/Mexico is consistent importer of refinery products and often runs losses due heavy tax burden, government price controls & lot of other government induced issues.
Even as just an alternate – it should be of great concern to all the US Refineries operating as JV taking Maya crude as base! The rapid decline in Pemex production from its major crude fields and the increasing capacity of its domestic refineries (great deal coking addition) also mentioned in this report.
<See previous post & my comments for more details/background at News post on Mexico Crude: 10/20/08 Falling oil prices & 8/04/08 Aging Pemex Plants falter & 7/07/08 Pemex cuts rates 15% to US Refineries JV>
One of issues NOT mentioned in the article – is oil production has been falling since 2005 and it is doubtful the proven reserves will last more 10 year in aging fields Pemex. And while the Mexican Senate has admitted something needs to be done & even approved a reform bill to spur private investments – it is still hostage to the leftist who led oil industry nationalization in 1938 & still hold hostage and claim it represents stealth privatization. This is the crux crude problem – they have Huge offshore reserves in deepwater that cannot be developed without help global majors with that technology (now somewhat in question due Horizon spill) but they wont help without a portion to offset risk & size investments required.
Pemex & outside Contractors they now allow just do not have the technology of the Oil industry majors to develop these reserves.
So real problem is that old outdated investment barriers prevent Pemex/Mexico from reaching their own domestic solution to this issue – Makes you wonder what the hell NAFTA was all about if they can invest/own US companies/assets like Cemex but won’t allow US/foreign ownership in Mexico.

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