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Mexico eyes first-ever imports of U.S. light crude

Mexico eyes first-ever imports of U.S. light crude

Posted by Juan Gavasa on January 09, 2015

State energy giant Petroleos Mexicanos has proposed an oil swap with the United States that would include Mexico's first-ever sustained imports of light crude from its northern neighbor.

Pemex said in a statement Thursday that it made the proposal to the U.S. Commerce Department's Bureau of Industry and Security, which is studying the viability of the transaction.

Under the proposal, Mexico would import up to 100,000 barrels per day of light crude and condensates to mix with its own heavier crude at Pemex's Salamanca, Tula and Salina Cruz refineries.

The company also said it would ship heavy crude to the United States as part of the swap but clarified that the transaction "does not represent an additional commitment to the 803,000 barrels of Mexican crude that were exported daily on average to the United States last year."

Pemex said the proposal was made amid a "significant increase in light crude production in the United States," which has experienced a shale boom in recent years.

The main benefits for Mexico would be to achieve greater gasoline and diesel production, smaller output of fuel oil and petroleum products with high sulfur content, as well as better use of domestic refineries' installed capacity, Pemex said.

The state oil company issued its statement after U.S. Commerce Secretary Penny Pritzker and Mexico's ambassador to the United States, Eduardo Medina Mora, told the media this week that discussions on a potential oil swap were ongoing.

"This is to optimize the operation of our refineries, having less production of by-products that are not particularly attractive on international markets nor necessary in the Mexican market," Medina Mora told Mexican reporters on Wednesday after a meeting at the Foreign Relations Secretariat.

Imports of U.S. light crude would occur within the framework of a recent constitutional overhaul that ended Pemex's 75-year-old monopoly and opened Mexico's energy sector to private investment.

Mexico, which is a net importer of refined petroleum products, is the world's 10th-largest oil producer and third-leading supplier of crude to the United States after Canada and Saudi Arabia.

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