Boosted by Eni, Mexico's Newest Crude Finds Its Way to U.S. Refiners

Stefanie Eschenbacher and Arathy Somasekhar
Friday, August 26, 2022

Exports of Mexico's newest crude are ramping up under Italy's Eni as U.S. refiners find it an apt replacement for banned Russian oil and one that complements domestic grades. 

The shipments, which started in April according to Refinitiv Eikon data, represent the first crude exports made by an oil company other than state firm Pemex in Mexico's history.

Known as Mizton crude, it comes from a cluster of offshore fields where Eni began output after securing a production sharing contract as part of the country's landmark energy reform, a market-opening now largely frozen under President Andres Manuel Lopez Obrador.

Four vessels chartered by Eni Trading & Shipping have discharged at U.S. ports since April. They have carried a total of about 2.2 million barrels of the crude, a grade lighter and sweeter than Mexico's flagship Maya crude, to refiners including Marathon Petroleum and PBF Energy , U.S. Customs and Refinitiv Eikon data showed. 

A fifth Eni cargo of 525,000 barrels of Mizton on Aframax tanker Nippon Princess is scheduled to discharge this week on the U.S. East coast, according to the tracking.

The cargo was purchased by PBF Energy, an industry source said. 

Pemex, Eni, and PBF Energy did not respond to requests for comment. Marathon Petroleum declined to comment on its crude sourcing, saying the information was proprietary.

MORE TO COME

More deals for Mizton crude are expected in the coming months, including the first cargo entitled to Mexico as its share of output. It will be marketed by Pemex's commercial unit PMI, according to two people familiar with the matter.     

Mizton is similar in quality to other U.S. Gulf grades used by coast refiners and a good replacement of Russia's flagship Urals crude, said Rohit Rathod, senior oil analyst at energy data firm Vortexa. 

Russian oil, which accounted for about 3% of total U.S. crude imports last year, was banned in April as part of U.S. sanctions after Russia's invasion of Ukraine. 

The new Mexican crude comes from the Mizton field, part of the Mizton-Amoca-Tecoalli cluster in the southern Gulf of Mexico. Eni estimates the fields hold about 2.1 billion barrels of oil and gas. 

The Miamte floating production storage and offloading (FPSO) facility, which can handle up to 90,000 barrels per day of output, began pumping the oil in February.

(Reuters - Reporting by Arathy Somasekhar in Houston and Stefanie Eschenbacher in Mexico City; additional reporting by Marianna Parraga; Editing by Josie Kao)

Categories: Energy Activity Production North America Gulf of Mexico

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