Most Mexican crude exports halted by bad weather

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2007

The bulk of Mexico's crude oil exports were suspended on Monday as stormy weather in the Gulf of Mexico closed major oil ports along the southern Gulf coast and shut down a fifth of the country's oil production.Mexico's three main oil ports: Dos Bocas, Cayo Arcas and Pajaritos, remained closed on Monday evening after being shut on Sunday as a cold front hit, the transport ministry said. State-owned oil monopoly Pemex, which normally ships around 1.7 million barrels of oil per day, said crude was only being exported from the smaller port of Tampico. The rough weather was expected to last at least another day. coming on the heels of storms last week that killed 21 oil workers and grounded exports for two days - brought heavy rain, winds of 40 mph (65 kph) with occasional gusts of 52 mph and waves up to 20 feet (6 metres) high.Pemex said on Sunday it was shutting down 600,000 barrels per day of oil production in the Gulf of Mexico - around a fifth of its daily output - as storage tanks at the closed ports filled up, creating bottlenecks."Once the weather phenomenon passes, tankers will arrive once more to be loaded for export and we will be able to open the wells again," Pemex exploration and production head Carlos Morales said during a third-quarter results conference call.Port officials on the Gulf coast said the weather was too rough for ships to leave. Oil was being shipped only from Tampico, farther north on the Gulf coast, and from Salina Cruz on the Pacific Coast, until that port was also closed on Monday afternoon due to the same cold front."The port is still closed for all shipments. It's still bad," said Angel Antonio Gonzalez, an official at Dos Bocas, one of three major Gulf ports where Pemex ships its crude oil to the United States.Stormy weather in the Mexican Gulf last week killed at least 21 oil workers fleeing a damaged oil platform in life rafts and shut off oil exports for a couple of days.It also left a 5.5-mile (9-km) oil slick as 500 barrels of crude leaked from the damaged platform, environmental watchdog Profepa said. Officials in Tabasco state said the spill left black stains along some 19 miles (31 km) of coast, although Pemex denied the slick had reached land and said the stains were unrelated.The new cold front interrupted repairs to the damaged rig, meaning oil continued to seep out during Monday, Pemex said.The storms are the latest headache for Pemex as it grapples with declining yields at its biggest oil field, Cantarell, and after Hurricane Dean knocked oil output in the third quarter.Pemex also suffered two crippling bomb attacks this year by leftist rebels on its crude oil and natural gas pipelines.In yet more bleak news for the oil company, residents of Veracruz state were raging at a pipeline spill last week of some 10,000 barrels of processed fuel which by Monday was oozing down rivers and into the Gulf of Mexico.Pemex, which deployed some 600 workers to clean up the spill, said on Monday 303,750 liters, or 1,910 barrels, had been mopped up and the clean-up should be finished by Nov 2.However local media said the oil was staining beaches around the Gulf of Mexico port of Coatzacoalcos and Veracruz Gov. Fidel Herrera said Pemex had caused 8 billion pesos ($747 million) in damage to the state with oil and fuel spills this year.Mexico is the world's No. 5 producer of crude oil by volume and a top three supplier to the United States, whose southern refineries faced a second week of delays to oil supplies.Pemex reported a third-quarter net loss of $1.23 billion on Friday, as quarterly sales came in flat at $26.29 billion.Third-quarter oil production fell 6 percent year-on-year due to Hurricane Dean closing oil wells and because of declining output at the 28-year-old Cantarell oil field.Pemex, under pressure to ramp up output while also reversing a slide in reserves, hopes to hike its replacement ratio for proved reserves to 50 percent at the end of the year from 41 percent at the end of 2006, exploration and production chief Carlos Morales told an investor conference call.