Posted on 08/27/2015 10:29:10 AM PDT by thackney
Since heavy sour takes more to refine this will cost refiners money unless they get more heavy sour than they give light sweet to Mexico or
they get subsidies from the taxpayers (which government loves, loves, loves)
I wonder how the Donald’s negotiators would have handled this?
It is not a government swap. No subsidies.
Oil companies are not trading without cash differences.
Why would they ever be involved? The only action from the government is "proceed". The real action the US government should take is remove the export ban and get out of the way.
Pemex should know by the first quarter of next year which light U.S. crudes will work best, following test runs, he said.
The imports could come from either onshore or offshore production in the United States, he added, including shale or conventional oil.
He added that Pemex has already asked for several price quotes from U.S. crude producers, though he declined to name them.
- - - - - - -
Pemex collects bids from private companies including price for the swap.
Seems reasonable. But it looks like the Mexicans would build refineries that could process their own sulfur laden oil at a much cheaper cost..............................
Hercules Offshore, Inc
http://finance.yahoo.com/echarts?s=HERO+Interactive#{”range”:”5y”,”allowChartStacking”:true}
July, 15, 2013, closed at $7.85 per share
Today it opened at $0.05 per share
Ya takes your chances in the oil bidnes’
Build upgraded refineries takes some Pemex is lacking:
Billions of dollars...
And many years...
More Bankruptcy, more mergers.
Part of the cycle.
It wouldn’t if PEMEX was a PRIVATE company...................
Many years? Hell look at all the Mexicans they got! 6 months tops................
Like making a baby in a few weeks if you use enough pregnant ladies??
There’s a new housing subdivision being built across the street from me on an old elementary school property. There are 42 houses being built. The workers are all Hispanic/Latino and they are flying up! After the concrete foundation is laid and set, they swarm in, frame up the entire house in less than a day, roof it the next, drywall, electrical and plumbing and then outside brick work to finish. A new $300k+ home in less than a week..........................
Yeah, a bit of a difference from needing to build a coker unit and others.
20,000 hp gas compressor, Massive Drums that take a year or more for fabrication, etc
You are not going to go find the parts at home depot. Nor are you going to build it with semi-skilled labor.
Heck it took a few years just to engineer and design a similar project in Indiana. Look at the description of the project make BP Whiting capable of handling more heavy crude from Alberta.
800 modules and vessels
• 1,200 pieces of equipment
• 380 miles of pipe
• 50,000 tons of steel
• 1325 miles of wire and cable
• 15,000 concrete truck deliveries
• 95,000 truckload deliveries
• 14,000 piles to be driven
• 200 material deliveries per day
• 9,000+ Staff/Craft on ‘One Whiting’ site at peak
http://www.bp.com/content/dam/bp-bitumen/en_us/documents/WRMP.pdf
Yeah, but the Mexicans don’t have to worry with all those silly EPA and OSHA regulations and zoning requirements!....................
True that, but I’ve had experience with Mexico trying to build their own coker drums on site. After 18 months we gave up and placed an order at a fab shop. About a 2 year delay in construction.
Almost right isn’t a great way to deal with high temperature hydrocarbons.
“Seems reasonable. But it looks like the Mexicans would build refineries that could process their own sulfur laden oil at a much cheaper cost..............................”
One would need capital to do this.
Who would lend such to Mexico? No outsider would build a refinery there under the threat of it being nationalized.
But it would sure make life a whole lot more exciting!..................
I’ve been on the repair team following “exciting” in oil/gas/petrochm a few times...
I’ve been fortunate to not be there during the truly exciting times.
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