SINGAPORE/TOKYO, April 14 (Reuters) - Mexican oil firm Pemex says it is in talks with buyers in Japan and South Korea over the chloride content of its crude and would offer discounts if the level of the chemical that can cause corrosion was higher than usual.
State-run Pemex said last month it would export about 4 million barrels via five cargoes of its Isthmus crude to South Korea between January and April 2015, with most of that going to Hyundai Oilbank and the rest to GS Caltex. Japan also imports Mexican crude.
With Pemex’s sale price, known as an official selling price (OSP), for its Isthmus crude set at a discount to a basket of oil benchmarks of $5.45-$7.85 a barrel between January and April, the five cargoes have a cash value of some $200 million.
Three of those cargoes have been received in Asia and refinery sources said they contain unusually high levels of potentially damaging chloride. A fourth cargo is due to be delivered this month.
P.M.I. Comercio Internacional, Pemex’s commercial arm, said it was in discussions with refiners in Japan and South Korea regarding measurements of chloride in its shipments, and that price reductions could be offered if the chloride content turned out higher than specified.
“We are working with them (Japanese and South Korean refiners), and working to see what their measurements were compared to ours,” Jose Manuel Carrera, chief executive officer of P.M.I. Comercio Internacional, told Reuters by telephone.
“If the chloride is higher than what we specified, of course the price comes down a little bit... I sold it at a normal price, and if it turns out that effectively it has that or another component which is outside of the specifications, there is a commercial adjustment which is stipulated in the contracts,” he added.
It was not clear whether Pemex would be obliged to give discounts due to any heightened chloride content or if it was considering a rebate out of goodwill.
A spokesman for South Korea’s Hyundai Oilbank said the firm was “considering a claim” with Pemex over higher-than-specified chloride contents. Another spokesman said that the chloride content in a 1-million-barrel Isthmus cargo from March was “manageable” and that there had been no disruptions.
GS Caltex, which has also recently imported from Pemex, declined to comment.
South Korea earlier this year imported Mexican crude for the first time in 25 years, while Japan last year resumed buying crude after a break of 11 years.
In Japan, a spokesman at Japan’s Cosmo Oil, which imported 1 million barrels of Isthmus crude in February, said it was currently experiencing no disruptions to its main crude distillation units.
A senior industry source familiar with the matter said Cosmo Oil had been informed by Pemex that the chloride figures “were a little high” but added that they were no big problem as the refineries could dilute Pemex’s supplies with other crudes to make it easier to process.
The source said it was unclear whether shut-downs of Cosmo Oil’s secondary refining units at Yokkaichi and Sakai in mid-March of up to a week were related to chloride problems. (Reporting by Jacob Gronholt-Pedersen in Singapore, Anna Isabel Martinez in Mexico and Osamu Tsukimori in Tokyo; Additional reporting by Meeyoung Cho in Seoul; Writing by Henning Gloystein; Editing by Edward Davies and Crispian Balmer)