Chevron Delays 3.5Mb of Pemex Crude Shipments

Flooded Gulf Coast
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Chevron (NYSE: CVX) has delayed shipments of a total 3.5 million barrels of crude from Mexico's state oil firm Pemex to its Pascagoula refinery in Mississippi due to damage from Hurricane Katrina, a Pemex official told BNamericas, confirming local press reports.

The refinery, which normally takes an average 130,000 barrels a day (b/d) of crude from Pemex, has cut seven 500,000b shipments, the official said.

Chevron has not said when Pascagoula would be fully operational again.

At current prices the total value of these shipments to Pemex is some US$120mn, newspaper El Universal quoted Bernardo de la Garza, director of crude sales at Pemex's international subsidiary PMI, as saying.

However, the delayed shipments should not affect Pemex's overall sales as it plans to place the crude in Portugal and India in late September-October, the official said.

Chevron is the only one of Pemex's four regular clients in the Gulf region that has so far delayed shipments due to Katrina.

Pemex is continuing to monitor the situation with regard to its other clients in Louisiana and Mississippi affected by Katrina. Pemex normally supplies 28,000b/d of Maya crude to ExxonMobil's Baton Rouge refinery, 100,000b/d to Marathon's Garyville refinery and 53,000b/d to Valero's St Charles refinery, El Universal reported.

Katrina knocked eight of the 12 oil refineries in Louisiana and Mississippi out of operation last week, reducing the US refining capacity by 12.5%, or about 2 million barrels a day of crude (Mb/d).

Analysts say Mexico will face competition from Venezuela as well as other countries in the Middle East and Africa trying to sell their surplus oil in the US market and may have to drop its prices as a result.

Pemex's crude was fetching an average of US$52.52 a barrel in export markets on Friday, down US$1.90/b from the previous day, according to information from Mexico's energy secretary.

Pemex is the world's third biggest oil producer, pumping about 3.4Mb/d, of which it exports about 1.23Mb/d to the US and about a third of that to refineries in Louisiana and Mississippi.

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