Mexico may increase oil exports

Jun 23, 2004 02:00 AM

Mexico's new energy secretary, Fernando Elizondo, says his country may increase oil exports by 100,000 bpd later in the year to help stabilize international prices.
"Mexico agrees with the policy of stabilizing international prices, and so will contribute, within the limits of its production capacity, to the goal of increasing global production so as to achieve stability," Elizondo told.

The announcement came two weeks after OPEC, which does not include Mexico, decided to increase its oil output by 2 mm bpd beginning in July. Mexico exported 1.86 mm bpd last year and expects to sell 1.8 mm bpd this year. But Elizondo said Mexico has "little margin" to increase its exports because the state-owned oil company, Petroleos Mexicanos (Pemex), is producing practically at full capacity.
Elizondo said this year's oil revenue surplus, which by law the federal government must share with the states, would be between $ 5 bn and $ 7 bn. The average target price of Mexico's crude oil blend was $ 20 perbarrel for this year, but the conflict in Iraq and the Middle East sent international prices soaring way above that level.

Light crude ended trading at $ 38.75 per barrel in New York. Elizondo said prices for Mexico's oil would continue to be "reasonably high" for the rest of the year and would average between $ 22 and $ 26 per barrel. Regarding the energy-industry reforms that business leaders believe essential for Mexico's further development, Elizondo said he has already had some preliminary talks with legislators but warned that no agreements have yet been reached.
"It's not something that's going to get done in a week, a month or two months. It's something that's going to take a little more time," he said.

Regarding the charge of illegality brought by opposition legislators before the national auditing board against the multiple-service contracts through which Pemex opened up gas exploitation to private companies, Elizondo said "it is making noise among investors."
Pemex announced plans to invest some $ 5.7 bn in exploration and production projects in southern Mexico through 2007. The investment funds will be earmarked for exploratory drilling, injectors and repairs, as well as 96 construction projects and the maintenance of 904 oil installations and pipelines.

Pemex chief Raul Munoz Leos said the company in 2004 would spend a record $ 1.58 bn in southern Mexico. He also said that this year Pemex has contracted projects worth $ 544 mm and has plans for other contracts worth more than $ 1 bn.
Pemex is one of the largest oil companies in the world and one of the United States' main suppliers. The state oil monopoly's sales account for close to 35 % of the Mexican federal government's annual budget,

Source: MercoPress
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