SEATTLE (Reuters) - Mexican state-run oil company Pemex expects to begin testing light crudes as soon as July for possible import, looking to boost margins at its domestic refineries, its chief executive said on Tuesday.
Pemex has for decades exported crude oil but has hardly ever imported the commodity, preferring to process domestic crudes at its six refineries in Mexico.
Pemex Chief Executive Officer Carlos Trevino said the company would likely seek imports resembling its proprietary Isthmus grade of light crude, the production of which has been declining in Mexico.
“We are going to start testing maybe in the third quarter,” Trevino told Reuters on the sidelines of a conference in Seattle.
“We are going to be looking for the cheaper mix ... We may be using the (West Texas Intermediate), something from the U.S., he said.
“What I personally expect is that we can find something very similar (to Isthmus).”
The company [PEMX.UL], one of the largest in Latin America, has said it was looking for lighter crude grades for its refining network, which is currently operating at around 48 percent of its 1.54 million barrel-per-day capacity.
Trevino reiterated that importing could be a temporary strategy, partly because of the oil it has been producing at its new Ixachi field in Veracruz.
“It’s a lot of gas and very, very light crude so we expect to get more oil from that field, so maybe that will help us on the mix we are using for our refineries,” he said.
Trevino also said Pemex’s annual crude oil hedging program is set to cover about a third of annual production at a price of $51 per barrel, but he declined to elaborate.
The company was processing between 813,000-820,000 bpd as of Sunday, but expects to process an average 850,000 bpd for the rest of the year.
Pemex has increased processing levels at its Madero refinery and expects to “finish the starting up” of its Minatitlan facility this month, Trevino said. It may begin maintenance at its Cadereyta and Tula refineries later this year.
“We are going to be (processing) around 800,000 bpd at the end of the year,” he added.
Trevino also said he expects Pemex’s rate of replacement for its proven oil reserves in 2018 to be “pretty much the same or a little above” the 17.5-percent rate it achieved in 2017.
Reporting by Eric M. Johnson in Seattle; Editing by Joseph Radford