Mexico's Oil Refineries Are Operating Like It's 1990 Again

(Bloomberg) -- Petroleos Mexicanos’s refineries are operating at the lowest level in almost three decades. And unlike last year, this time there’s no earthquakes, floods and fires to blame it on.

In October, Pemex’s refinery output was 485,478 barrels a day, the lowest since December 1990, and equivalent to 30 percent of its total capacity. The country has seen refining output slide to record low levels as maintenance has stalled, Pemex’s refinery budget has been slashed and the company no longer produces enough light crude oil to feed its plants.

Pemex has been buying crude from the U.S. since October to make up for the shortfall, a plan aimed at helping it meet rising fuel demand in the winter months. Importing U.S. oil has “without a doubt helped us to improve the crude mix to feed our refineries,” Pemex chief executive officer Carlos Trevino said Tuesday in Mexico City.

Maintenance, Outages

Pemex’s decline in crude processing is due to a prolonged maintenance at the Madero refinery in Tamaulipas, which has had zero output since June, and electricity outages at Minatitlan in Veracruz, said Trevino.

Still, the outgoing Pemex leader, who will be replaced by Octavio Romero on Dec. 1 when Mexico’s next president Andres Manuel Lopez Obrador takes office, was optimistic that the refineries would end the year on an uptick, averaging 800,000 barrels a day.

“We are going to restart Madero and work at the maximum level in Salamanca and Tula with the imported light crude mix,” said Trevino. “The strategy is to feed the refineries in the center of the country with imported light crude in November and December, which is when we have higher consumption in the center of the country.”

To contact the reporter on this story: Amy Stillman in Mexico City at astillman7@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Mike Jeffers

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