UPDATE 1-Mexico's Pemex in talks with producers for crude swap -refining chief

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MEXICO CITY, Aug 14 (Reuters) - Mexico's state-run Pemex has started talks with oil producers to swap a portion of its output of heavy Maya crude for lighter imported grades that better fit some of its refineries, the chief of industrial transformation said.

Mexico needs medium sweet crudes to ramp up oil processing and distillation at some refineries that have been struggling to increase profitability, Carlos Murrieta told Reuters in an interview late on Friday.

The company tried a similar deal in 2015 but oil prices were higher, availability was tighter and there was a ban on U.S. crude exports - all obstacles to adequate supplies.

"They have to be accessible crudes for us. We are analyzing different options... tanker movement is an important issue for optimizing supply," Murrieta said.

He did not elaborate on expected volumes or timing, but said Pemex would not go as far as Russia to find barrels. It would rather find a supplier in the Atlantic basin.

Brazil is the only Latin American oil producer currently increasing crude exports. U.S. medium grades and West African crudes could also match the characteristics of the oil Pemex is seeking.

Pemex's domestic refining network worked at 57 percent of its 1.63-million-barrels-per-day capacity in the first half due to a fire at its largest facility in June and a recent strategy change to ramp up production of high-value distillates by limiting the processing of heavy domestic crudes.

A more diverse crude diet would allow Pemex to reach the goal of producing 60-70 percent of distillates versus 50 percent in recent years, just as the country is liberalizing fuel prices at gas stations amid an energy reform that will give foreign refiners and retailers a portion of market share.

It would also allow Pemex - which in July-August made extra fuel purchases of around 3 million barrels due to operational problems - finally to curb gasoline imports to around 500,000 bpd.

Supplies of heavy crude in the Atlantic basin are tight as prominent producers Mexico, Venezuela, Colombia and Ecuador have reduced exports, narrowing the spread of some heavy crudes against lighter grades.

Pemex expects its refining network to process 1 million-1.1 million bpd of crude by year end, versus an average of 926,000 bpd in the first half, once maintenance work at several facilities is completed.

Murrieta also said that Pemex is still looking for investors for its refineries. A partner for Tula refinery's delayed coker should be chosen before year end, he said, and a couple of interested firms have visited Salina Cruz refinery while Pemex decides whether to farm out that facility this year or in 2018. (Reporting by Marianna Parraga and Ana Isabel Martinez; Editing by Lisa Von Ahn and Dan Grebler)