Mexico May Need to Import Crude and Cease Exports After 2030

Crude oil producer and exporter Mexico could see itself in need of crude imports in 2030 as its field production is set to rapidly decline at the end of this decade while it expands its refining capacity, Reuters reported on Thursday, citing projections from the Mexican Energy Ministry.

Currently, Mexico pumps around 1.8 million barrels per day (bpd) of crude and condensates and is betting on a major new refinery to process some of the crude into fuels and end its dependence on fuel imports.

However, the new fields that have started up recently will not be enough to offset what is expected to be a rapid decline in output from mature fields from 2030 onwards.

Per the energy ministry assumptions of three scenarios, Mexico could be able to raise its crude oil production to between 2.164 million bpd and 2.39 million bpd in 2028. However, all three scenarios, which also assume some new discoveries, project a rapid decline in output from 2030, per the estimates reported by Reuters.

The recently launched Trion field production – expected to reach a peak of 100,000 bpd in 2028 – and the Zama field could temporarily raise Mexico’s crude oil output this decade. But major declines at other fields would likely force the country to turn to crude imports to keep its refineries operating at relatively high utilization rates.

Earlier this week, industry regulator CNH said that Mexico’s crude oil production fell by 6.2% year-over-year to just 1.57 million bpd in June. Crude plus condensate output came in at 1.84 million bpd, also down by 6.2% on the year, per the data reported by Bnamericas.

Meanwhile, Mexico’s newest refinery, the long-delayed Olmeca processing facility with a planned capacity of 340,000 bpd, is unlikely to be ready to produce commercial quantities of fuels by the end of this year, five sources familiar with the operations told Reuters last month.

The Olmeca refinery, also known as Dos Bocas, is a flagship project of outgoing Mexican President Andrés Manuel López Obrador, who sought to reduce Mexico’s dependence on fuel imports from the United States.

The refinery, however, has seen multiple delays and budget overruns and is now estimated to have needed double the initial budgeted investment. Initially budgeted at $8 billion, the refinery went into significant cost overruns, with the price tag to date standing at some $18 billion and the start date still unclear.

By Tsvetana Paraskova for Oilprice.com

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