Pemex Plans Sharp Drop in Crude Exports as it Ramps Up Refining

MEXICO CITY, Dec 28 (Reuters) - Mexico's Petroleos Mexicanos (Pemex) said it would drastically reduce planned crude exports next year as the state oil company works to meet the government's target of refining all of its oil domestically.

Pemex Chief Executive Officer Octavio Romero projected that its crude exports would fall to 435,000 barrels per day (bpd) in 2022 from 1.019 million this year as Mexico incorporates operations at its Deer Park refinery in Texas into its planning.

Pemex this year moved to acquire the controlling interest held by its partner in Deer Park, Royal Dutch Shell, and the government expects the deal to be completed next month.

Pemex in a presentation at a news conference Tuesday forecast that from 2023 crude exports would end as Mexico refined all of its oil, in keeping with President Andres Manuel Lopez Obrador's plan to make the country self-sufficient in gasoline.

"For 2023 and 2024, practically all Pemex's production will be refined because the Dos Bocas refinery will begin operating," Romero said, referring to a new facility being built in Lopez Obrador's home state of Tabasco, due to be completed next year.

Mexico for years relied significantly on Pemex revenues to fund part of the federal budget.

That dependence has eased as the economy diversifies. Still, the 2022 budget plan approved by Congress foresees Mexico exporting 979,000 bpd of crude, more than double the new target, which envisages Deer Park refining much of the oil instead.

If Mexico does not reap the income planned in the export target, "there's going to be a serious problem for public finances," said Juan Carlos Romero Hicks, a senior lawmaker for the center-right opposition National Action Party (PAN).

The finance ministry did not reply to a request for comment.

Lopez Obrador took office three years ago vowing to revive Pemex and lift crude output. But with Mexican output stagnating below 1.7 million bpd, he said in March that Pemex would cap production at 2 million bpd, thereby benefiting the environment.

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