Latin American oil producers mull light crude imports to cut costs
By Marianna Parraga
HOUSTON Aug 28 (Reuters) - At least three oil-producing Latin America countries may soon start importing cheap, light crude to replace costly purchases of refined products, ending decades of crude self-sufficiency.
State-run companies in Mexico, Venezuela and Argentina have said they are considering importing light crudes.
Those could be blended with domestically-produced heavy crudes so they can be more easily exported, or be used to improve the crude diet of old refineries that lack enough deep conversion capacity to transform heavy oil into light products such as gasoline and diesel.
Latin American countries are scrambling to curb rising costs for fuels, used mostly for transportation and power generation, that have weighed on budgets as demand grows.
The fuel is often purchased on the open market at a hefty markup. Those outlays could be slashed by entering crude supply contracts and tapping into surging output of light crudes, some of them from the U.S. shale oil boom.
Though the crude imports could help trim public expenditures, they could also cause political headaches as the countries have enjoyed crude self-sufficiency for almost a century. These nations jointly produce some 6.4 million bpd.
"This commercial agreement is intelligent because Pemex is upgrading its refineries to process more heavy crude and they are trying to increase utilization rate in the meantime", said
Luisa Palacios, from Medley Global Advisors in New York. Continuación...