April 30 (Bloomberg) -- Petroleos Mexicanos, the state- owned oil company, said it had a loss at its crude oil refining unit during the first quarter because of higher crude prices.

The loss of 7 cents a barrel this quarter compares with profit of about $6.90 per barrel a year earlier, said Chief Financial Officer Esteban Levin in a conference call with analysts today. It was the only loss for the unit since 2003, the earliest data available from Pemex.

Pemex reported first-quarter net income of 3.3 billion pesos ($315 million) on April 28, as taxes, refining costs and imports eroded gains from record prices for Mexican crude. The average price for Mexican crude rose 73 percent in the first quarter to $83.10 a barrel.

Other fuel makers, such as Valero Energy Corp. and ConocoPhillips weren't able to pass on to motorists the full cost of crude oil's surge to above $100 a barrel. So-called crack spreads, or refining profit margins, dropped 23 percent from a year earlier along the U.S. Gulf Coast, according to Bloomberg data.

Pemex, as the company is known, shut its largest refinery for 10 days after an earthquake in February. The Salina Cruz refinery, the only one on Mexico's Pacific Coast, has the capacity to process about 290,000 barrels of crude a day.

Pemex's refineries operated at 83 percent of capacity in the quarter, down from 86.8 percent a year earlier. Pemex's six refineries have a capacity to process about 1.3 million barrels of crude a day.

Gasoline Imports

Mexico imports about 40 percent of domestic gasoline demand. President Felipe Calderon says Pemex must build a new refinery every three to four years until 2021 to end imports.

Pemex operations are divided into four units: refining; petrochemical; advanced petrochemicals; and oil and natural-gas exploration and production. The company didn't provide a breakdown of earnings for each unit.

During the quarter, Pemex drilled 155 wells, up from 149 a year earlier. The company expects to begin start-up tests for a nitrogen plant in Ciudad Pemex in the state of Tabasco that will help stem the decline in production at Cantarell, the company's largest oil field.

Output at Cantarell fell by about a third in March, the largest decline since 1995.

Processing of natural gas fell 4.2 percent to 4.19 billion cubic feet per day while natural-gas production climbed 13 percent during the quarter to 6.59 billion cubic feet per day, primarily from gas found alongside crude oil.

Seismic Purchase

Pemex acquired almost 4,000 square kilometers of three- dimensional seismic mapping in the Burgos Basin, a natural-gas field in northern Mexico, said Vinicio Suro, managing director of planning and evaluation at Pemex's exploration and production unit, on the conference call.

The company, which has identified six new fields, plans to provide more information on reserves in the basin in its next quarterly earnings report, Suro said.

-- With reporting by Jim Kennett in Houston. Editor: Robin Saponar, Kim Jordan

To contact the reporter on this story: Andres R. Martinez in Mexico City at amartinez28@bloomberg.net; Thomas Black in Monterrey at tblack@bloomberg.net

Last Updated: April 30, 2008 13:42 EDT