Pemex Board Balks At Cost Overruns At Mega Oil Refinery
08.22.2022 By Ricardo Perez - NEWS

August 22, 2022 [OilPrice.com] – Some members of the board of directors at Pemex have expressed concerns about the huge overruns the Mexican state oil giant faces in building its flagship mega refinery Dos Bocas, sources familiar with the board deliberations told Bloomberg.

 

While Pemex’s board approved an increase in the budget for the refinery project last week, the vote wasn’t unanimous. Three board members were against raising the budget, according to Bloomberg’s sources who spoke on condition of anonymity.

Moreover, at least one board member expressed concerns that cost management might not be as transparent as it should be, Bloomberg’s sources said.

Early this year, it emerged that the construction of the Dos Bocas refinery was running $3.6 billion over budget, and delays could mean that the flagship project of Mexican President Andrés Manuel López Obrador may not start operations this year and not even in time for the state oil firm’s plan to end oil exports in 2023 and focus on refining fuel domestically.

Dos Bocas is the pet project of López Obrador designed to wean the country off fuel imports. Originally, the plan for the refinery in López Obrador’s home state of Tabasco was expected to cost US$8 billion. Even when it was announced, analysts doubted the budgeted costs would be sufficient and were not optimistic about the financial viability of the refinery.

Last week, Pemex asked the government for another nearly $6.5 billion in funding for works at the refinery this year, a document seen by Reuters showed.

Higher costs for building “associated” components necessary to operate the refinery are the main reason for the increase Pemex is seeking, according to the document.

With the additional funding, Pemex’s flagship refinery, which was expected to start operations this year, would see total costs rising to a massive $14.6 billion, far above the original $8-billion budget.

Pro Trial: Access 10,390 Tank Terminal and Production Facilities

10,390 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Exxon Preparing to Open Its Massive $2B Refinery Expansion in Beaumont
01.30.2023 - NEWS
January 30, 2022 [msn] – Exxon Mobil said Monday it finished building its $2 billion refine... Read More
Valero Has Best Year Ever in 2022 as 4Q Profits Triple, Topping Wall Street Expectations
01.30.2023 - NEWS
January 30, 2022 [San Antonio Express News] – Valero Energy Corp. cruised past Wall Street ... Read More
Mobil Continues to Invest in Australia's Fuel Security
01.30.2023 - NEWS
January 30, 2022 [ExxonMobil] – Melbourne, Australia – Mobil Oil Australia Pty Ltd (Mobil... Read More
Kernel Acquires Terminal In Yuzhny Port
01.30.2023 - NEWS
January 30, 2022 [Ukrainian News] – Kernel Holding, one of the largest operators on the oil... Read More