Mar 16 05:08 AM GMT Mexico starts arranging extra US April oil supply

For customers the question now is not when, but how many extra barrels Mexico's state oil monopoly Pemex will cough up.

March 13, 2000, 03:40 PM

LONDON (Reuters) - Mexico is courting its thirsty US customers with heavy hints of extra oil just two weeks before its pact on supply curbs with OPEC expires, industry sources said.

"Petroleos Mexicanos (Pemex) has been all over us during the last few days," a leading US refiner said. "They want to know how much more oil we can take from April 1." For customers the question now is not when, but how many extra barrels state oil monopoly Pemex will cough up. Some traders see non-OPEC Mexico, having fulfilled its obligations to OPEC, fully resuming the exports it has withheld since last March.

"Personally, I don`t think Mexico will restrict output at all," one regional industry official said. "I don`t see them being pro-rated on the basis of extra OPEC output. They will produce at the full rate," said another. For the past year, non-OPEC Mexico -- which crafted an historic production-cutting accord with OPEC`s Saudi Arabia and Venezuela -- has been throttling back 325,000 barrels per day (bpd) of export sales, primarily to the United States. If OPEC were to agree to hoist output by about 1.5 million bpd when output pact expires on March 31, Mexico`s pro-rata allocation would rise by 110,000 bpd -- only about a third of the oil it cut and kept as mothballed capacity.

Mexico -- along with Gulf OPEC producers Saudi Arabia, Kuwait and the United Arab Emirates -- is in the enviable league of producers with spare production potential.

http://www.akhbar.com/article/0,1690,Business-15669,00.html

-- Martin Thompson (mthom1927@aol.com), March 16, 2000