Mexico's Ongoing Decline in Net Oil Exports

[Jeffrey Brown + 208]

Mexico is on the verge of becoming a net oil importer, and it is a classic case history of what I call “Net Export Math.”

Their total petroleum liquids production in 2004 was 3.8 million bpd, versus total liquids consumption of 2.0 million bpd, resulting in 2004 (total petroleum liquids) net exports of 1.8 million bpd (BP data).

Production in 2017 was down to 2.2 million bpd, versus consumption of 1.9 million, resulting in 2017 net exports of 0.3 million bpd.

Note that given an ongoing production decline in a net oil exporting country, unless they cut their domestic liquids consumption at the same rate as the rate of decline in production, or at a faster rate, it’s a mathematical certainty that their net export rate of decline will exceed their rate of decline in production and that their net export rate of decline will accelerate with time.

Mexico’s 2004 to 2017 rate of decline in production was 4.2%/year, versus a net export rate of decline of 17%/year.

Year to date production through October, 2018 was 2.1 million bpd.  Assuming no change in consumption, their 2018 net exports would be down to 0.2 million bpd.  Note that this would be a simple percentage year over year decline in net exports of 33%, versus a production decline of only 4.5%.

At the current rate of decline in their ratio of production to consumption, Mexico will probably hit zero net oil exports in 2020.

[CMOP + 227]

@Jeffrey Brown

We'll see how AMLO handles this situation. 
He has mentioned that he wants Pemex to keep more crude for its refineries instead of exporting it - to reduce Mexico’s dependency on imported fuels. Unfortuantely, Mexico needs a total infrastructure revamp for this to take place. 

He's also looking to hit 2.6mpd in 6 years. How likely is that? Not very likely when looking at the S&P Global Platts report - In October  Pemex’s refineries hit a record low utilization rate of 25.7 percent. Not a great sign.