Mexico (Business Emerge), July 26: Mexico’s state-owned oil company, Pemex, has struggled to meet local fuel demands due to its outdated refineries that cannot process the heavy Maya crude it mainly produces. This has forced Mexico to export crude while importing gasoline and diesel, largely from the United States. Outgoing President Andres Manuel Lopez Obrador aimed to end this dependency by commissioning a new refinery to address the fuel supply gap caused by Pemex’s underfunded and aging refineries.
The Olmeca refinery in Dos Bocas, Tabasco, commissioned by Lopez Obrador, was designed to process 340,000 barrels per day (bpd) and help Mexico meet its fuel consumption needs. However, despite significant investment, the project is behind schedule and over budget. Once operational, it is expected to help Mexico temporarily meet its fuel demands.
Incoming President Claudia Sheinbaum now faces a new challenge in achieving energy independence, as domestic crude supply continues to fall. Despite Mexico being a major crude producer, output from its older oil fields, particularly in the Gulf of Mexico, has hit a more than four-decade low. This decline in production could force Mexico to import crude to sustain its expanded refinery capacity within the next decade, a significant shift for the country.
Recent projections from the energy ministry suggest that this self-sufficiency may be short-lived. Production is predicted to rapidly decline from 2030, necessitating crude imports. Pemex’s output might see a temporary boost to almost 2.247 million bpd by 2028, thanks to fields like Zama and Trion. However, this is a middle scenario, and the outlook remains uncertain without substantial investment in exploration and production.
Neither Pemex, the energy ministry, nor the president’s office have commented on these projections. Sheinbaum’s administration will need to address these challenges to realize the longstanding dream of energy independence.