Mexico expects U.S. oil swap, another crack in crude export ban
By David Alire Garcia and Valerie Volcovici
MEXICO CITY/ WASHINGTON, March 25 (Reuters) - Mexican state oil firm Pemex expects imminent approval from the U.S. Commerce Department to allow it to swap up to 100,000 barrels of heavy crude for a similar amount of lighter U.S. oil, what could be the latest milestone toward loosening the four-decades old ban on exporting U.S. oil.
"Our expectation is that it happens soon," Jose Manuel Carrera, CEO of Pemex's commercial arm P.M.I. Comercio Internacional, said in an interview Friday. "I would like to see the approval tomorrow, or I would have liked to see it yesterday, but the truth is that this is a permit that the United States unilaterally approves."
The Commerce Department's Bureau of Industry and Security, which oversees the process, on Wednesday declined to comment on the application.
The Mexican company hopes swaps will pave the way for the United States to eventually allow for direct crude oil exports to Mexico, an exemption it allows for Canada. In January, U.S. crude exports to Canada reached an all-time record, according to the U.S. Energy Information Administration.
U.S. law allows swaps of crude on a case-by-case basis with "adjacent countries" based on "convenience and increased efficiency of transportation."
Pemex announced in January it had asked for permission to import up to 100,000 barrels a day of light crude and condensates to mix with its own heavier crude at domestic refineries in exchange for heavier Mexican crude for processing at U.S. refineries. The swap would be the first since the late 1990s, when the two neighbors conducted an exchange of crude from the U.S. Strategic Petroleum Reserve.
Sources familiar with the process said the approval has taken longer than expected because the BIS has asked for assurances that Pemex has specific U.S. buyers to take the equivalent amount of Mexican crude in return. That requirement would prove that the Mexican oil is part of an additional contract, not crude that is already being imported into the U.S.
Carrera said Pemex does not need to export any new crude to the United States to satisfy the requirements of the swap because "there are many Mexican barrels of crude that arrive at the United States that are not part of a fixed-term contract ... that arrive on a spot basis." Continuación...