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                Mexico Proposes Historic Crude Oil Swap With US

   by Reuters

   Mexico's state oil company, Pemex, said Thursday that it had proposed
   an oil swap with the United States, potentially ushering in the first
   sustained crude imports by Mexico from its northern neighbor after
   years of self-sufficiency.

   Pemex said it had set out a plan 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, Mexico would provide the United
   States with heavier Mexican crude for processing at U.S. refineries,
   and would use the imports from the United States to boost local
   gasoline and diesel output.

   An official at Pemex said the oil swap could go ahead as soon as the
   first quarter of this year.

   While Mexican officials signaled their readiness to import crude
   several times last year, Thursday's news was the first official
   confirmation that they were seeking a formal swap that would open the
   door to sales despite a 40-year-old U.S. ban on exports.

   If approved, the imports could be a watershed in energy relations with
   the United States, where output has surged because of a shale boom.

   Until now, Mexico, the world's 10th-biggest producer of crude, has
   focused on exporting much of that oil, though it already imports much
   of its gasoline.

   The proposal, which is still being negotiated with the U.S. government,
   does not signal an increase in Mexican oil shipments to the United
   States, Pemex said.

   "This does not represent an additional commitment to the 803,000
   barrels of Mexican crude that were exported on average daily to the
   United States last year,'' Pemex said.

   Following the Mexican government's 2013 energy reforms, which ended
   Pemex's 75-year monopoly on production and exploration of oil and gas,
   the state-run company will soon face the arrival of powerful foreign
   competitors.

   Pemex, whose output slipped last year to the lowest on record, said the
   oil swap would help improve processing at its Salamanca, Tula and
   Salina Cruz refineries, and would also enable the company to cut
   transport costs.

   In the late 1990s, Mexico and the United States conducted an exchange
   of crude from the U.S. Strategic Petroleum Reserve.

   Mexico is the third-biggest crude supplier to the United States, behind
   Canada and Saudi Arabia, but it has maintained a decades-old devotion
   to crude oil self-sufficiency at home.

   U.S. Commerce Secretary Penny Pritzker said this week that the United
   States was in talks with Mexico over whether to export light crude oil
   to its neighbor.
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   [1]http://www.voanews.com/content/mexico-proposes-crude-oil-swap-united
   -states/2591012.html

References

   1. http://www.voanews.com/content/mexico-proposes-crude-oil-swap-united-states/2591012.html