Mexico's Pemex Plans to Stop Exporting Crude Oil in 2023

By Anthony Harrup

MEXICO CITY--Mexican state oil company Petroleos Mexicanos will stop exporting crude oil in 2023 due to the expansion of its refinery system, including the acquisition of the Deer Park refinery in Texas, Chief Executive Octavio Romero said Tuesday.

Mr. Romero said that with the incorporation of Deer Park, the expected completion in 2023 of a new refinery in southern Mexico, and the upgrading of other existing refineries, Pemex will be able to process nearly all of its crude oil production by 2023.

Pemex agreed in 2021 to acquire Shell Oil Company's 50% stake in the Deer Park refinery joint venture, and the Mexican government expects the transaction to close in January.

Excluding crude sent to Deer Park, Pemex's exports will fall to 435,000 barrels a day next year from around 1 million barrels a day, and then to near zero the following two years, Mr. Romero said. Pemex currently produces around 1.7 million barrels a day of crude oil.

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

President Andres Manuel Lopez Obrador, a nationalist who wants to eliminate Mexico's reliance on fuel imports, has likened selling crude oil and buying gasoline to selling oranges and buying orange juice.

He opposed the changes made under his predecessor that opened the state-run oil and electricity industries to greater private investment, including the first private oil exploration and production contracts in almost eight decades.

Mr. Lopez Obrador halted all new oil-block auctions when he took office in December 2018, and aims to recover state control of the electricity market with a controversial proposal to change the constitution. His administration also seeks to recover share of the domestic fuels market that Pemex has lost to private companies.

A number of legal and regulatory changes made to favor state energy companies have been blocked in Mexican courts.

Write to Anthony Harrup at anthony.harrup@wsj.com

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December 28, 2021 12:04 ET (17:04 GMT)

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