• SOUR: The implementation of a new international low-sulfur requirement for ships in 2020 (IMO 2020) is set to hurt Mexico’s state-owned oil company, Pemex, in 2020 given that it will decrease the global appetite for heavy crude oil, the company’s main staple.
• HIT: Nowadays, Pemex oil production is mainly based on Maya, a heavy crude oil with high percentage of sulfur content (3.5%), that can only be processed by complex refineries. In November, 73% of Pemex monthly oil production was Maya, significantly higher than in years past.
• VALUE: “Even in order to sell those heavy crude, they need light (crudes) because they are going to have to mix them. There is a need to produce light and there are good deposits of light crude in Mexico.”, said Alejandra León, an energy specialist at IHS Markit.
• RULE: Established in 2016, the International Maritime Organization (IMO) will implement the new IMO 2020 that will affect Mexico even when the country has not ratified Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL), which includes the rule.
