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February 27, 2024

New Pemex oil refinery to again miss production launch – document

New Pemex oil refinery to again miss production launch – document


MEXICO CITY – A new oil refinery belonging to Mexico’s state-owned Pemex, a top priority of the country’s president, will again miss its promised launch date to begin production, according to an internal audit report seen by Reuters.

New Pemex oil refinery to again miss production launch – document

Source: Reuters

The report stated that the current July goal was “not feasible,” which would mark a setback for President Andres Manuel Lopez Obrador, who has pitched the Olmeca facility as key to boosting domestic production of motor fuels while lessening a longstanding dependence on imports.

When it does begin transforming crude into refined products, the refinery built to process 340,000 barrels per day (bpd) of oil will be Pemex’s biggest among seven domestic facilities.

Late last year, Lopez Obrador said the refinery at the Gulf Coast port of Dos Bocas in his home state of Tabasco would begin by processing half of its capacity this July, or 170,000 bpd, a year after a flashy, symbolic inauguration.

Lopez Obrador’s energy minister previously said the refinery would come online last December.

The audit report, which is dated this month and is not public, indicates “that the July 2023 start date is not feasible” and that construction of the refinery’s coking plants needed to efficiently process Pemex’s heavy crude are “not yet finished.”

Asked to explain the delay outlined in the report, Pemex referred Reuters to the energy ministry, which the president has put in charge of the project, but the ministry did not respond to a request for comment.

The Olmeca refinery has also been plagued with cost overruns, as the price tag has roughly doubled from the $8.9 billion initially budgeted in 2020.

The May report cited refinery contracts worth the equivalent of $16.9 billion – close to a billion dollars more than the sum approved by Pemex’s board last August.

When it does launch, the refinery is seen producing 280,000 bpd of gasoline and diesel.

(Reporting by Adriana Barrera; Writing by Brendan O’Boyle; Editing by David Alire Garcia and Jacqueline Wong)

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