Page 7 - LatAmOil Week 33 2022

LatAmOil MEXICO LatAmOil

Pemex seeking nearly $6.5bn in additional

funds for work on Olmeca refinery in 2022

MEXICO’S national oil company (NOC)
Pemex has asked the government to make nearly
$6.5bn in extra funding available this year for
work on the Olmeca refinery project, according
to a Reuters report.
Citing a document and two sources familiar
with the matter, the news agency reported that
a majority of Pemex’s board of directors had
approved plans for submitting the request for
additional funding to the government. Board
members voted on a proposal that asked for
$853mn to cover start-up costs and $5.6bn to
ensure the continuation of work, it said.
Pemex requested the additional funds in
order to foot the bill for start-up operations, The Olmeca refinery was still under construction on opening day (Photo: Pemex)
higher-than-expected construction expenses
and activities not included in the original scope According to the document seen by Reu-
of work, they said. Most of the extra costs stem ters last week, Pemex had spent $10.3bn on the
from the building of “associated” infrastructure Olmeca plant as of June 2022. Around that time,
facilities needed to operate the oil-processing Mexican President Andres Manuel Lopez Obra-
plant, they added. dor was saying he expected the NOC to end up
Reuters’ sources did not elaborate, but Mex- spending $11-12bn, significantly more than the
ico’s Energy Minister Rocio Nahle revealed official revised estimate of $8.9bn. Some indus-
earlier this year that Pemex had added another try analysts had already said, however, that they
$900mn in expenses by taking steps to ensure believed the final budget would top $14bn.
the refinery’s ability to operate independently. Pemex has been building the Olmeca plant
These steps involved constructing a co-genera- with enthusiastic support from the president,
tion plant, an aqueduct and a 65-km natural gas who wants the NOC to retain its leading role
pipeline to the refinery, Nahle explained in an within Mexico’s fuel and energy sector. Lopez
interview with El Universal in April. Obrador sees the refinery project as a means of
The sources also indicated that the total ensuring that 100% Mexican oil production can
budget for the scheme would reach $14.6bn be refined locally and of making domestic petro-
if Pemex’s request was granted. The Mexican leum product supplies both plentiful and cheap.
government had originally estimated that the The NOC officially launched the refinery last
340,000 barrel per day (bpd) refinery would cost month. The plant has yet to begin regular com-
$8bn to build, but the project has been plagued mercial production, though, as many of its units
by postponements and cost overruns. remain unfinished or are still being tested. ™

US VIRGIN ISL ANDS
Petcoke fire still smoldering at Limetree

Bay Refinery in St. Croix, PHRT reports

US-BASED Port Hamilton Refining and Trans- Islands (USVI).
portation (PHRT) has confirmed that fire- PHRT has said that emergency crews are
fighters are still working to extinguish a blaze working to contain the flames, which originated
that broke out on August 4 at the Limetree Bay from a pile of petroleum coke, Argus Media
Refinery, located on St. Croix in the US Virgin reported on August 15.

Week 33 17•August•2022 www. NEWSBASE .com P7