*

Pemex's crude output fell by 6% in August compared with

last

year

*

Gasoline and diesel imports remain high despite increased

local

production

*

Olmeca refinery's output far below targets set by CEO

Octavio

Romero

*

Nationalistic president's push to strengthen Pemex falters

By Ana Isabel Martinez

MEXICO CITY, Sept 27 (Reuters) - Crude output by Pemex

fell in August as Mexico's national oil company failed

to reduce fuel imports in line with company targets, while

overall falling well short of the lofty energy trade goals of

the country's outgoing president.

While locally produced petroleum product volumes rose during

the month, gasoline and diesel import volumes were still much

higher than Pemex's own output as its new oil refinery showed

only meager production during its first couple of months

online.

President Andres Manuel Lopez Obrador, who will leave office

next week, pledged at the start of his term six years ago to

stop exporting crude oil and instead expand domestic refining in

a bid to end a long-standing dependence on foreign gasoline and

diesel imports, mostly from U.S. suppliers.

But Pemex's liquids production, crude plus condensate, fell

by about 6% in August compared with the same month last year to

settle at 1.77 million barrels per day (bpd), according to

company data published late on Wednesday.

Crude output by itself stood at just under 1.5 million bpd

in August, which for months has slid to a new low not seen in

more than four decades.

Pemex has blamed the production fall on the natural aging of

its top-producing fields.

Meanwhile, the company's refined product output totaled 1.02

million bpd in August, up 15% compared with same period last

year, including 290,100 bpd of gasoline and 188,200 bpd of

diesel.

But motor fuel output was dwarfed by production of nearly

306,000 bpd of fuel oil, a highly contaminating product Pemex

produces in large part due to its inability to more efficiently

process its heavy crude oil.

Meanwhile, August imports of gasoline totaled 416,700 bpd

and 142,000 bpd of diesel.

Lopez Obrador has often described his nationalistic Pemex

strategy as "rescuing our sovereignty," a policy that also

sought to mostly sideline foreign or private producers while

funnelling tens of billions of dollars in government support to

the heavily indebted state-owned company.

A few months ago, Lopez Obrador admitted that Mexico will not be

able to end crude exports by the end of his term as promised; in

August, crude exports reached 730,000 bpd. Instead, he said,

that should happen next year under the leadership of his

successor and close ally, President-elect Claudia Sheinbaum.

While petroleum product imports have dipped by around 16%

overall during his term, compared with Lopez Obrador's first

full year in office in 2019, they will almost certainly remain

stubbornly above the expectations the company's chief executive

set out just a few months ago.

In July, CEO Octavio Romero said fuel imports in September

would dip to about 52,000 bpd.

Romero, a confidant of the president going back decades, has

also promised optimistic production and processing targets for

the country's newest, largest oil refinery, which have failed to

materialize.

The Olmeca refinery , with a crude

processing capacity of 340,000 bpd, produced only 28,400 bpd of

gasoline and 1,100 bpd of diesel in August.

Romero had said around the start of the month that the

facility, located on Mexico's Gulf coast, would produce 175,000

bpd of gasoline and 130,000 of diesel in August while reaching

its full processing capacity.

After two months online, its crude processing reached about

a quarter of its capacity, or about 84,100 bpd.