Source: U.S. Energy Information Administration, based on data published by Petróleos Mexicanos

Crude oil inputs to Mexico’s petroleum refineries declined for the fifth consecutive year in 2018, falling to nearly 600,000 barrels per day (b/d), a 50% drop from 2013 levels. This decline in crude oil processing has coincided with a decrease in domestic production of the light crude oil that the country’s refineries are better suited to process. Mexico has increasingly relied on imports of petroleum products from the United States to satisfy domestic demand.

Petróleos Mexicanos (Pemex), Mexico’s national oil company, owns and operates the country’s six petroleum refineries, which have a combined atmospheric crude oil distillation capacity of about 1.6 million b/d. On an aggregate basis, performance at Pemex refineries has declined over the past five years after maintaining an average refinery utilization rate near or above 75% between 1990 and 2013. By 2018, the utilization rate of Mexico’s refinery network fell to less than 40%.

Pemex’s refineries are mostly configured to process light crude oil. Of its six refineries, three (Minatitlan, Cadereyta, Madero) are equipped with coker units to produce lower-sulfur gasoline from heavy crude oil. The 35% decrease in Mexican light crude oil production between 2013 and 2018 has resulted in limitations on crude oil refinery inputs. Inputs of light crude oil to Pemex refineries fell below 400,000 b/d in 2018, about a 50% reduction from 2013 levels.

Refineries require periodic maintenance to ensure optimal operation of processing units that refine crude oil into petroleum products such as motor gasoline and diesel. Crude oil inputs at Pemex refineries since 2014 have been further constrained by operational issues associated with the company’s refineries.

Pemex maintains control over much of Mexico’s petroleum product imports and distribution. Declines in domestic production of liquid transportation fuels have increased Mexico’s reliance on foreign sources of refined petroleum products. Pemex imports of motor gasoline increased about 230,000 b/d between 2013 and 2018, offsetting similar declines in domestic production at Pemex refineries.

Source: U.S. Energy Information Administration, based on data published by Petróleos Mexicanos

Mexican imports from the United States have helped to offset a large share of Pemex’s shortfall in motor gasoline production, supplying about 535,000 b/d in 2018, more than double the level of imports in 2013. Mexico receives the largest share of U.S. motor gasoline exports, with much of the remainder destined for Central and South American countries.

U.S. refineries along the Gulf Coast are able to process heavy Mexican crude oil blends with a high yield of finished, low-sulfur motor gasoline. Pemex currently obtains some of its motor gasoline from the United States through its joint venture with Shell at the 340,000 b/d refinery in Deer Park, Texas. The joint venture, which was recently extended through 2033, includes an agreement for Pemex to provide a share of heavy crude oil in exchange for finished petroleum products.

In September 2018, the Mexican government announced an initiative called the National Refining Plan to help Mexico achieve energy independence by 2022. The plan includes upgrades and reconfigurations at Pemex’s six refineries, as well as construction in Dos Bocas of a seventh refinery, which is designed to process 340,000 b/d of heavy crude oil. If achieved, Pemex refineries would be able to process 1.86 million b/d of crude oil to produce an estimated 781,000 b/d of motor gasoline and 560,000 b/d of diesel fuel.

Principal contributors: Steve Hanson, Neil Agarwal

The 9th edition of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) Awards, hosted by the Abu Dhabi National Oil Company (ADNOC), is now open for submissions.

In this fourth industrial age it is technology, innovation, environmental leadership and talented workforces that are shaping the companies of the future.

Oil and gas is set to play a pivotal role in driving technology forward, and at this year’s ADIPEC Awards emphasis is placed on digitalisation, research, transformation, diversity, youth and social contribution, paving the way towards a brighter tomorrow for our industry.

Hosting the ADIPEC Awards is one of the world’s leading energy producers, ADNOC, a company exploring new, agile and flexible ways to build its people, technology, environmental leadership and partnerships, while enhancing the role of the United Arab Emirates as a global energy provider.

Factors which will have a prominent influence on the eventual decisions of the distinguished panel of jury members include industry impact, sustainability, innovation and value creation. Jury members have been carefully selected according to their expertise and knowledge, and include senior representatives from Baker Hughes, a GE Company, BP UAE, CEPSA Middle East, ENI Spa, Mubadala Petroleum, Shell, Total and Weatherford.

Chairperson of the awards is Fatema Al Nuaimi, Acting CEO of ADNOC LNG, who says: “At a time when the industry is looking towards an extremely exciting future and preparing for Oil &Gas 4.0, the awards will recognise excellence across all its sectors and reward those who are paving the way towards a successful and sustainable future.”

Ms Al Nuaimi, continues: “we call upon our partners across the globe to submit their achievements in projects and partnerships which are at the helm of technical and digital breakthroughs, as well as to nominate the next generation of oil and gas technical professionals, who will spearhead the ongoing transformation of the industry.

These awards are recognising the successes of those companies and individuals who are responding in the most innovative and creative manner to the global economic and technological trends. Their contribution is pivotal to the development of our industry and to addressing the continuous growth of the global energy demand. “

Christopher Hudson, President of the Energy Division, dmg events, organisers of ADIPEC, says: “With ADNOC as the host and ADIPEC as the platform for the programme, the awards are at the heart of the worldwide oil and gas community. With its audience of government ministers, international and national oil companies, CEOs and other top global industry influencers, the ADIPEC Awards provide the global oil and gas community the perfect opportunity to engage, inspire and influence the workforce of the future.”

Entries can be submitted until Monday 29th July for the following categories:

Breakthrough Technological Project of the Year

Breakthrough Research of the Year

Digital Transformation Project of the Year

Social Contribution and Local Content Project of the Year

Oil and Gas Inclusion and Diversity Company of the Year

Young ADIPEC Technical Professional of the Year

A shortlist of entries will be announced in October and winners will be revealed on the first day of ADIPEC 2019, Monday 11th November, St. Regis Saadiyat Island, Abu Dhabi.

ABOUT ADIPEC

Held under the patronage of the President of the United Arab Emirates, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, and organised by the Global Energy Division of dmg events, the Abu Dhabi Petroleum International Petroleum Exhibition and Conference (ADIPEC) is the global meeting point for oil and gas professionals. Standing as one of the world’s leading oil and gas events.  ADIPEC is a knowledge-sharing platform that enables industry experts to exchange ideas and information that shape the future of the energy sector. The 22nd edition of ADIPEC will take place from 11th-14th November 2019, at the Abu Dhabi National Exhibition Centre (ADNEC). ADIPEC 2019 will be hosted by the Abu Dhabi National Oil Company (ADNOC) and supported by the UAE Ministry of Energy & Industry, Department of Transport in Abu Dhabi, the Abu Dhabi Chamber of Commerce and Industry, Masdar, the Abu Dhabi Future Energy Company, Department of Culture and Tourism - Abu Dhabi, the Abu Dhabi Department of Education and Knowledge (ADEK). dmg events is committed to helping the growing international energy community.

Source: U.S. Energy Information Administration, based on World Input-Output Database
Note: Dollar values are expressed in 2010 U.S. dollars, converted based on purchasing power parity.

The industrial sector of the worldwide economy consumed more than half (55%) of all delivered energy in 2018, according to the International Energy Agency. Within the industrial sector, the chemicals industry is one of the largest energy users, accounting for 12% of global industrial energy use. Energy—whether purchased or produced onsite at plants—is very important to the chemicals industry, and it links the chemical industry to many parts of the energy supply chain including utilities, mines, and other energy product manufacturers.

The chemicals industry is often divided into two major categories: basic chemicals and other chemicals. Basic chemicals are chemicals that are the essential building blocks for other products. These include raw material gases, pigments, fertilizers, plastics, and rubber. Basic chemicals are sometimes called bulk chemicals or commodity chemicals because they are produced in large amounts and have relatively low prices. Other chemicals—sometimes called fine or specialty chemicals—require less energy to produce and sell for much higher prices. The category of other chemicals includes medicines, soaps, and paints.

The chemicals industry uses energy products such as natural gas for both heat and feedstock. Basic chemicals are often made in large factories that use a variety of energy sources to produce heat, much of which is for steam, and for equipment, such as pumps. The largest feedstock use is for producing petrochemicals, which can use oil-based or natural-gas-based feedstocks.

In terms of value, households are the largest users of chemicals because they use higher value chemicals, which are often chemicals that help to improve standards of living, such as medicines or sanitation products. Chemicals are also often intermediate goods—materials used in the production of other products, such as rubber and plastic products manufacturing, agricultural production, construction, and textiles and apparel making.

Source: U.S. Energy Information Administration, WEPS+, August 2018
Note: Dollar values are expressed in 2010 U.S. dollars, converted based on purchasing power parity.

The energy intensity of the basic chemicals industry, or energy consumed per unit of output, is relatively high compared with other industries. However, the energy intensity of the basic chemicals industry varies widely by region, largely based on the chemicals a region produces. According to EIA’s International Energy Outlook 2018, Russia had the most energy-intensive basic chemicals industry in 2015, with an average energy intensity of approximately 98,000 British thermal units (Btu) per dollar, followed by Canada with an average intensity of 68,000 Btu/dollar.

The Russian and Canadian basic chemicals industries are led by fertilizers and petrochemicals. Petrochemicals and fertilizers are the most energy intensive basic chemicals, all of which rely on energy for breaking chemical bonds and affecting the recombination of molecules to create the intended chemical output. These countries produce these specific basic chemicals in part because they also produce the natural resources needed as inputs, such as potash, oil, and natural gas.

By comparison, the energy intensity of the U.S. basic chemical industry in 2015 was much lower, at 22,000 Btu/dollar, because the industry in the United States has a more diverse production mix of other basic chemicals, such as gases and synthetic fibers. However, EIA expects that increasing petrochemical development in the United States will increase the energy intensity of the U.S. basic chemicals industry.

The United States exports chemicals worldwide, with the largest flows to Mexico, Canada, and China. According to the World Input-Output Database, U.S. exports of all chemicals in 2014 were valued at $118 billion—about 6% of total U.S. exports—the highest level in decades.