Christian Davis Quoted by Bloomberg on Possible Crude Exports to Mexico
Bloomberg, for its article “Mexico’s Interest in U.S. Oil Seen Opening Export Door,” quoted Akin Gump international trade counsel Christian Davis on the U.S. Commerce Department’s pending approval of U.S. companies exchanging or “swapping” light sweet crude with Mexico in response to interest expressed by Petróleos Mexicanos (Pemex) in such an arrangement.
According to the article, U.S. oil producers are seeking permission to export light crude to Mexico in exchange for that country’s heavier oil, which can be processed at Gulf Coast state refineries. In addition to this type of exchange, companies might also be able to “swap” light crude for a refined product such as gasoline—a more complex transaction—with Mexico. Both would require Commerce Dept., though not congressional, approval, the article notes.
Davis noted that it can be difficult to have a swap transaction approved because companies must show that the oil produced in the United States is not marketable domestically. He explained, “The application can’t state that, ‘There’s a glut of crude oil in the U.S. and therefore our crude oil isn’t marketable,’ by showing large macro-economic graphs and trends. The application has to be product specific.”