Pemex Eyes Refinery Partnerships in Bid to Boost Efficiencies

Mexico's Pemex will seek partnerships with other companies to make its refineries more efficient, the head of the state oil giant said on Tuesday, citing its successful joint venture with Royal Dutch Shell (RYDAF) in Texas.

 

Pemex, which is grappling with a complex financial situation, has six refineries in Mexico with a combined capacity to process 1.6 million barrels per day (bpd). But oil production has been declining and reached just 1.08 million bpd in July.

 

Pemex Chief Executive Officer Jose Antonio Gonzalez Anaya said the company is evaluating options to optimize processes and improve its finances, which have been hit by falling oil prices, by cutting costs and reducing liabilities.

 

"We are going to seek partnerships ... We have a deal with Shell in Houston and it has worked very well. Now, we want to do a similar deal here," he said at an economists' roundtable hosted by Reuters in Mexico City.

 

However, Gonzalez Anaya said that the partnership structures have not yet been defined.

 

Since 1993, Pemex, through its PMI Norteamerica subsidiary, has had a partnership with Shell in the Deer Park refinery in Texas. The plant has a capacity to process 340,000 bpd of crude.

 

Under its agreement, each company provides 50 percent of the crude oil processed by the refinery and owns 50 percent of the production.

 

Pemex has acknowledged that its refining sector generates huge losses and that its plans require investments that the company cannot make right now, so it is seeking partnerships and eyeing the sale of noncore assets.