Mexico will no longer export oil from 2023 onwards

Mexico plans to stop exporting oil in 2023 as part of the Andrés Manuel López Obrador government’s strategy to achieve self-sufficiency in domestic fuel production.

State-owned Petroleos Mexicanos (Pemex) is expected to reduce its exports by less than half in 2022 and plans to completely suppress them in 2023 announced Octavio Romero, the company’s chief executive. The plan is aimed at strengthening the state’s refining capacity.

Mexico’s oil exports, currently estimated at more than one million barrels a day, will drop to 435,000 next year. “We hope that by 2023, 100% of Mexican oil will be refined for use in our country,” added Romero.

Self-sufficiency is a promise made by López Obrador in his 2018 election campaign. However, analysts consider it unlikely that all Mexico’s refineries will be enough to meet domestic demand in the period stipulated.

The energy coordinator of the Mexican Institute of Competitiveness, Oscar Ocampo, said he doubts that the refining expansion plan will be complete before the three years remaining in López Obrador’s term had passed. He cites the specific case of the Dos Bocas refinery, which is being built in Tabasco and is essential for the self-sufficiency plan. “It is highly unlikely that it will be completed before the end of the current administration,” he said.

Ocampo adds that attention should be shifted to the financial and operational situation of Pemex, which has been performing negatively in recent years – accumulating US$ 113 billion in debt, which makes it as one of the most indebted oil companies in the world.

In addition to Dos Bocas, Pemex has incorporated Deer Park, a refinery in Texas, into its refining system. The Mexican company has pledged to acquire a 50% stake in Shell Oil Company in the Deer Park refinery joint venture, and the Mexican government expects the transaction to happen in January

Mexico is an exporter of crude oil, but it imports most of the gasoline and natural gas it consumes. In the first 11 months of this year, the country had an oil trade deficit of $22.4 billion.

Pemex estimates that with the acquisition of Deer Park it will be possible to take the next generation of the Mexican refining system to 1.5 million barrels per day, which would represent more than double the 714,000 barrels processed this year, said Romero.

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