Mexico hydrocarbons watch: New Pemex refining targets, Hokchi share purchase

Mexico's oil and gas giant Pemex has adjusted downwards its production and refining goals and is on track toward fuel self-sufficiency.

CEO Octavio Romero Oropeza told the lower house that the state firm expects to achieve fuel self-sufficiency – refining all its crude output – by the end of the current administration in 2024 instead of next year, as previously estimated.

The delay can mainly be attributed to the construction of the Olmeca refinery, which despite being slated to come online in 2022 and having been inaugurated earlier this year, is far from being production ready. Oropeza said the project would probably be ready next year. Some experts believe it may not achieve full capacity until 2025.

The company also revised its production outlook from 1.92Mb/d (million barrels per day) to 1.8Mb/d, including its condensate output. As of August, output averaged 1.76Mb/d, according to company data, including an average condensate output of 84,000b/d.

The plan to become self-sufficient also involves the construction of two coking plants at the Salamanca and Tula refineries, and increasing capacity utilization of its refining park. It also considers the additional capacity Pemex acquired through the purchase of the Deer Park refinery in Texas.

Oropeza said the new coking plants would drastically reduce the country's fuel oil output, which has risen steadily in recent years and makes up about 30% of the output of its refineries.

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Germany's Wintershall will acquire a non-operating share of the Hokchi shallow water project.

After the operation is finalized next year, the company will own 37% of the production block, which is operated by Hokchi Energy, a subsidiary of Argentina's Pan American Energy. Wintershall could increase its participation to 40% at a later date, the company said in a release.

Hokchi is one of the most significant privately operated blocks in Mexico, with current production of 26,000b/d and plans to reach 37,000b/d in 2023.

The purchase will need a green light from hydrocarbons regulator CNH and competition watchdog Cofece.