National Refining System Performance Dips Amidst Olmeca Challenges

Mexico‘s state-owned petroleum giant, pemex, is grappling with refining challenges as its National Refining System operates at just 45% capacity. february figures reveal a processing volume of 898,153 barrels per day (bpd) across its seven refineries.The new Olmeca refinery, a flagship project of former President Andrés Manuel López Obrador, is significantly underperforming, processing a mere 6,797 bpd, utilizing only 2% of its intended capacity.

Olmeca Refinery’s Rocky Start

Despite a slight increase of 1% in overall crude oil processing compared to January,largely due to Olmeca commencing operations (it processed no crude in January),the refinery’s output remains far below expectations. this underperformance casts a shadow over Pemex‘s broader refining goals.

Throughout March, the Olmeca refinery reached a process of 100,000 barrels of heavy crude oil.
Víctor Rodríguez Padilla, General Director of Pemex

According to Pemex‘s director, adjustments to equipment design and electrical failures have plagued the Olmeca refinery, leading to operational halts since its launch in July.The project’s cost has also ballooned, exceeding $18 billion USD, more than double AMLO’s initial commitment of $8 billion USD.

Annual Refining Volumes Decline

Year-on-year, Pemex‘s refining output has decreased by 4%.While 2024 saw peak performance, reaching 1.013 million bpd in August and a 55% utilization rate across its six existing refineries (excluding Olmeca), scheduled maintenance, crude oil shortages, and operational needs for installing cokers in Salina Cruz and Tula have hampered current production levels.

Future Projections and Uncertainties

Despite the current challenges, Pemex remains optimistic. Víctor Rodríguez Padilla projects that the Olmeca refinery will reach 220,000 bpd in April, utilizing 65% of its capacity. Though, given the refinery’s history of setbacks, these projections remain uncertain. The success of the Olmeca refinery is crucial for Pemex to achieve its refining targets and reduce Mexico’s reliance on imported fuels.Currently, Mexico imports approximately 40% of its gasoline needs, according to the Energy Information Governance (EIA).