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Mexico's AMLO eyes now crude oil theft



By Argus

Petroleumworld 01 17 2019

The Mexican government plans to start investigating potential crude theft as the country is still seeing fuel shortages as part of its strategy against theft of refined products, President Andres Manuel Lopez Obrador said.

"We want to review why crude production has fallen. We are going to review the possible huachicoleo [theft] in the export of crude," said Lopez Obrador, known as AMLO, this morning.

AMLO has long been a critic of the 2014 energy reform that dismantled Pemex's monopoly on the sector, claiming it has yet to make good on its promise to reverse declining oil production or deliver expected levels of private-sector investment. But his suggestion that production levels and export levels have fallen because of theft is new.

"There is almost 1mn b/d of crude leaving from Dos Bocas and we want to check if it really is 1mn b/d," AMLO said.

AMLO said yesterday that his government had also discovered crude theft from marine production platforms in the Gulf of Mexico, a problem that "we are going to face." AMLO did not provide any further details, but there has been an increasing theft of oil equipment in Mexico's prolific Campeche sound amid a lack of security measures.

Mexican oil production has been in decline for more than a decade because of low investment, with the lowest crude production in four years reported in November. State-owned Pemex produced 1.71mn b/d of crude in November, down by 2.7pc from October and down by 8pc from 1.9mn b/d in the same month of last year.

Pemex exported 1.1mn b/d of crude in November, up by 10pc on October but down by 18pc on the 1.4mn b/d of crude exported in November a year ago.

Despite AMLO's pledge to end crude imports, Pemex imported 300,000 bl of crude in December, he said this morning. Traditionally a crude exporter, Pemex announced last year that its downstream company, Pemex Transformacion Industrial, would start importing up to 100,000 b/d of light crude in an effort to boost flagging refining rates at its six refineries, particularly at its Salina Cruz refinery. AMLO has criticized the import of crude but he likely has little option given that Mexico's refineries are currently operating at around 30pc, with the Madero and Minatitlan refineries shut down.

Pipelines sputter under anti-theft strategy

The government's anti-fuel theft strategy, now in its fourth week, is continuing to be challenged by fuel thieves who last night tapped the Tula-Azcapotzalco diesel pipeline that supplies Mexico City, said Pemex chief executive Octavio Romero this morning. The pipeline was shut down but is expected to restart operations "in the coming hours," Romero said.

The Tula-Tuxpan refined products pipeline also remains shut down since yesterday as attempts to restart flows identified a series of further taps in the municipality of Tula, Hidalgo state. Pemex does not yet know when the pipeline will be reopened, Romero said.

Fuel shortages began in late December in central and western Mexico following the government's decision to combat fuel theft by shutting down key pipelines that have been subject to repeated illegal taps and shifting delivery of refined products to tank trucks. Authorities found 12,851 illegal taps in the first 10 months of 2018, according to data from Pemex.

The government is rolling out up to 5,800 soldiers so far 3,200 are in place, despite previous confirmations that the full complement was in place and 14 planes to protect 11 key refined products pipelines across the country, General Arturo Velazquez said this morning.

While the pipeline shut downs continue, Pemex will increase tank truck deliveries and it is also working on an agreement with freight companies to increase delivery across the country by rail, AMLO said this morning.

Some 3.8mn bl of fuels comprised of 2mn bl of gasoline, 1.4mn bl of diesel and 0.3mn bl of jet fuel are in transit in 15 vessels destined for the Gulf coast ports of Coatzacoalcos and Tuxpan and the Pacific coast ports of Rosarito, Topolobampo, Manzanillo and Lazaro Cardenas, said Romero.

Pemex has imported an average 764,800 b/d of gasoline so far this month, up by 37pc on December's 559,000 b/d. Private companies combined imported 49,700 b/d of gasoline, up by 19pc from the 41,900 b/d average rate in December, according to data from the energy ministry.




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