Mexico’s state-owned Petróleos Mexicanos, the second-largest exporter of crude oil to the U.S. after Canada, said in late December that it will slash its export volumes in 2022 and eliminate them completely in 2023. The plan is premised on Pemex’s expectation that, with increased utilization of the company’s six existing refineries and the impending start-up of a new one, it will need every barrel of the Maya, Isthmus, Olmeca, and other varieties of oil it produces. While at first glance it may seem that Mexico phasing out exports of crude would pose a major challenge to some U.S. refineries, there’s good reason to believe that in reality it won’t. In fact, as we discuss in today’s RBN blog, there may be less to Pemex’s planned export phase-out than meets the eye.
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For most of the past several years, there have been steady — and, for Mexico, disappointing — trends at Pemex, including:
- Declining crude oil production: 1.9 MMb/d, on average, in each of the past three years, according to Pemex, compared with 2.1 MMb/d in 2018, 2.2 MMb/d in 2017, and 2.5 MMb/d in 2016.
- Falling refinery utilization: Less than 50% currently, compared with about 90% for U.S. refineries.
- Sinking output of refined products: 231 Mb/d of gasoline and 116 Mb/d of diesel, on average, in the first 11 months of 2021, compared with 325 Mb/d and 216 Mb/d, respectively, five years ago.
Oh, and rising red ink: Pemex’s debt tops $100 billion, higher than any other energy producer on the planet. One metric that has held up for the company is crude oil exports (green layer in Figure 1): Pemex exported an average of just over 1 MMb/d in the January-through-November period in 2021, with more than 80% of those volumes being Maya, the company’s benchmark heavy, sour crude, which has an API of 21 degrees and 3.5% sulfur content. (Pemex tends to retain most of its lighter grades — Isthmus and Olmeca — for its six domestic refineries. More on these refineries in a moment.)
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About the song
“Mamma Mia” was written by Benny Andersson, Bjorn Ulvaeus, and Stig Anderson and appears as the first song on side one of ABBA's third studio album, ABBA. Released as a single in September 1975, it went to #32 on the Billboard Hot 100 Singles chart. The song was used as the title for the hit Broadway jukebox musical written by British playwright Catherine Johnson. A romantic comedy film version of the play was released in 2008, followed by a sequel, Mama Mia! Here We Go Again, released in 2018. Personnel on the record were: Anni-Frid Lyngstad (lead, backing vocals), Agnetha Faltskog (lead, backing vocals), Bjorn Ulvaeus (rhythm guitar, backing vocals), Benny Andersson (piano, marimba, backing vocals), Janne Schaffer (lead guitar), Mike Watson (bass), and Roger Palm (drums).
The album ABBA was recorded between August 1974 and March 1975 at the Glen, Metronome, and Ljudkopia studios in Stockholm, Sweden. Produced by ABBA members Andersson and Ulvaeus, the album was released in April 1975. It went to #174 on the Billboard 200 Albums chart. Seven singles were released from the LP.
ABBA is a Swedish pop group formed in Stockholm in 1972 by Bjorn Ulvaeus, Benny Andersson, Anni-Frid Lyngstad, and Agnetha Faltskog. The group's name is derived from an acronym of the first letters of their first names, arranged as a palindrome. They got their professional start when they won the Eurovision Song Contest in 1974 with their song, “Waterloo.” ABBA has released nine studio albums, two live albums, seven compilation albums, and 50 singles. Winner of a World Music Award and a member of the Vocal Group Hall of Fame, the group continues to record and released the first studio album in 40 years, Voyage, in November 2021. The group has plans to have a digital concert residency in London beginning in May 2022.
