Significant increases in Mexican crude oil sales to Japan are by no means certain even though the Japanese government is lending Mexico $500 million to increase export and refining capacity on its Pacific coast, the leading Japanese buyer here and some industry analysts say.
Mexico's billion-dollar Pacific Petroleum project is likely to increase sales of heavy Maya oil to Japan, but the future for light Isthmus crude - 87 percent of Japan's Mexico crude imports - remains in the mist, the leading Japanese buyer says.This project does not affect the world market, said Sumitomo Corp.'s Hiroshi Shindo, chief representative in Mexico City for the consortium that imports all of Japan's crude from Mexico. The quantity we import from Mexico will not change very much in the future unless some very effective and big bomb closes the Strait of Hormuz in the Middle East."
Japan now buys 97 percent, or about 180,000 barrels a day, of Mexico's crude sales to the Far East. Mexico's current oil export platform is 1.32 million barrels a day, about half of which goes to the United States.
Japanese imports of Maya probably will increase, Mr. Shindo says, largely
because a new pipeline carrying reserves from the Gulf of Mexico to the Pacific coast will cut transportation costs by more than half - from $1 plus a barrel to about 50 cents a barrel, by some estimates.
Japan presently ships Maya around Cape Horn - a 51-day trip. The new pipeline, slated to traverse the 66-mile Isthmus of Tehuantepec in southern Mexico, will allow for shipments directly across the Pacific - shortening the trip to 18 days, Mr. Shindo says.
An existing pipeline across the isthmus is used almost exclusively to carry Isthmus crude bound for Japan and to serve a refinery in Salina Cruz with both Isthmus and Maya.
Imports of Isthmus, now averaging about 158,000 barrels a day, are not likely to change much, and whether they increase at all is uncertain for two reasons, Mr. Shindo says.
One, the Japanese government dictates the private sector's oil purchases according to the aims of its foreign policy. Two, worldwide price competition for light crudes is severe.