3/28/2017 Bloomberg Markets
The newest oil refineries in Texas are looking to join the hottest two plays in the North American oil industry.
Raven Petroleum LLC and MMEX Resources Inc. are building refineries in the Eagle Ford and Permian Basin that will process ample local supplies of light crude into gasoline and diesel. The fuel will be shipped on existing rail lines across the border to Mexico, where the government has opened the market to foreign competition, attracting companies including BP Plc and Glencore Plc.
U.S. shale drillers have doubled the number of rigs seeking oil since May, with most of the gains seen in Texas. Production nationwide is expected to approach the all-time high from 1970. At the same time, Mexico’s gasoline demand is outpacing local supply, forcing the nation to increase imports, which government data show grew 3 percent year-on-year in 2016.
“It looks like they are a set of entrepreneurs that see opportunities in the refined fuels markets in Mexico as it’s getting deregulated and denationalized,” Neil Earnest, president of industry consultants Muse Stancil, said by phone from Dallas. “If you are sitting in Texas, you are sitting on low cost crude oil.”