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Mexico slashes supply pledge to planned Central American refinery
Platts
Mexico City
Petroleumworld.com 04 12 07
Mexico has drastically reduced its commitment on plans to build a 360,000
barrels/d refinery in Central America, President Fidel Calderon said Tuesday.
The project was part of the Mesoamerican Energy Integration Program,
a brainchild of Mexican President Vicente Fox, who handed over to Calderon on
December 1 last year. Fox had originally promised 230,000 b/d of heavy Maya
crude for the refinery, but now Calderon said state Pemex could guarantee only
80,000 b/d.
Calderon was speaking at a press conference after a summit on regional
development attended by many Central American leaders. The summit was held in
Campeche City, in southeastern Mexico.
However, Nicaragua's Daniel Ortega's was not present. It's considered
signicant because during a visit to Nicaragua in January, Venezuelan President
Hugo Chavez promised to build a 100,000-150,000 b/d refinery there that would
effectively compete with the Mexican plan.
The promise appeared to be Chavez's response to what many analysts saw as
Mexico's attempt to undermine his fiercely anti-American rhetoric in the
region. Mexican officials -- at least in public -- always maintained, however,
that politics played no part in their refinery plan.
Although Calderon and the Central American leaders who attended the press
conference played down the significance of Mexico's reduced pledge, the
230,000 b/d commitment was always regarded as the linchpin of the project.
Calderon said the new target was realistic in view of the sharp decline in
production from Cantarell, the huge heavy-crude complex in the Sound of
Campeche.
Critics of the Fox scheme had long claimed that 230,000 b/d would be far
more than Mexico could pledge without severe cutbacks in exports to the US.
Several major companies, such as BP, Shell, ConocoPhillips and
ExxonMobil, had expressed interest in building the Central American refinery,
but none has pursued the project. The reluctance is believed to be based
partly on concern over the reliability of Mexican crude supplies. Negative
appraisals of the economic growth prospects for Central America have also
potentially played a role.
Four companies have emerged from a pre-screening process of potential
bidders. The process is being handled by PMI, the foreign trading arm of
Pemex, which named them as China National Petroleum Corp., Reliance
Industries Ltd of India, San Antonio-based Valero Energy and Itochu of Japan.
PMI has estimated that the project will require an investment of $6-8
billion.
--Ronald Buchanan, newsdesk@platts.comFor simliar news, request a free trial to Oilgram News at
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Platts 11 04 07
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