Memorandum by the Chairman of the Foreign Petroleum Policy Committee ( Thomburg ) to the Secretary of State

Mr. Secretary: The Foreign Petroleum Policy Committee has reviewed the report of the Mission of Oil Experts to Mexico, which can be summarized as follows:

Producing operations currently require only maintenance and operating materials, but an expanded program of exploration drilling must be undertaken soon to strengthen the fast deteriorating reserve position. This is a very large undertaking and one that will require careful study.

The refineries, however, urgently require both maintenance and expansion materials in order to continue current operations and to fulfill requirements which may arise out of the war emergency.

The most important steps in the refinery expansion program have been recommended as follows:

Additions to the Mexico City Refinery to raise the crude distillation capacity from 18,000 barrels per day to 28,000 barrels per day.
Installation of heavy oil cracking units of 15,000 barrels per day capacity at the Mexico City Refinery.

The Mexico City Refinery operates on crude transported by pipeline, and the enlarged plant will satisfy the full requirements of the central plateau area, which is at present partially served by products laboriously and inefficiently carried by rail tank car.

The expanded operations of the Mexico City Refinery will yield certain products and gases which constitute the raw feed for the manufacture of high octane aviation gasoline. It is, therefore, considered desirable to install additional equipment for processing these raw materials into aviation gasoline in the amount of 1000 barrels per day.

The primary distillation and cracking equipment should be obtained from shutdown refineries in the United States, whereas the high octane manufacturing facilities will have to be ordered from manufacturers with the delivery schedule integrated into the overall program of the worldwide high octane gasoline plant constructions.

Petroleos Mexicanos should arrange for the construction of these new units by established firms of United States engineers and contractors. These firms should also be charged with the operations of the expanded units until Mexican personnel can be properly trained to take over.

The Foreign Petroleum Policy Committee approves of the procedure outlined above and recommends that the Mexico City Refinery expansion be approved.

Max Thornburg