México



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Pemex ready to close a $2.6 billion refining venture with Mitsui & Co.

Bloomberg

Pemex refining head looks to Mitsui-led deal to help struggling business. Company is in final stage of JV deal with Mitsui-led consortia. Pemex seeks new infrastructure to import crude for refineries.

By Amy Stillman

MEXICO CITY
Petroleumworld 02 02 2018

With its money-losing refineries producing the least fuel in 27 years and only a handful of private partnerships announced since Mexico's energy reforms, sealing a $2.6 billion venture with Mitsui & Co. will come as a relief to Petroleos Mexicanos.

Pemex is a few months away from closing an agreement for the project with a group led by Mitsui that will help Pemex increase the amount of fuels produced at its flagship Tula refinery by about 40 percent, reducing the nation's reliance on imports from the U.S. and elsewhere.

The Tula project “is what we are focusing our attention on,” said Carlos Murrieta, director of Pemex Industrial Transformation, speaking in a phone interview with Bloomberg. “We need to discuss a lot of things, but we are at the point of closing the deal.”

Running Low

Mexico's refineries registered the lowest production in 27 Years

1.357.007K 1994 -766.983K 2017

Source: Mexico's SIE

The consortium, comprised of Japan's Mitsui and Cosmo Oil Co. , Spain's Cia. Espanola de Petroleos and a joint venture between Mexico's Empresas ICA SAB and Fluor Corp. in the U.S., will construct and operate a delayed coker at the refinery in Hidalgo state.

The project is one of the biggest investments by a private company in Mexico's refining sector since the country enacted reforms several years ago that promised to revive Pemex's ailing plants. So far, the reforms have delivered little else.

Click here for a story on Pemex's search for a partner

Last year, Mexico imported the most fuel since at least 1990, when the Energy Ministry began publishing data. Pemex's six refineries were hit by earthquakes, flooding and fires. Budget cuts resulted in unit refurbishments being delayed or shelved, with the number of unscheduled stoppages more than tripling since 2013.

If that weren't enough, fuel theft is a massive hindrance to the refineries' operations, future investment and the safety of workers. Mexico's deadly drug cartels have muscled in on the business, costing Pemex about $1 billion a year.

Major maintenance could turn this around, said Murrieta. The company expects to finish work at its Minatitlan and Madero refineries by the end of March and start repairs at the Tula and Salamanca plants this year. Last year, Cadereyta underwent a revamp and the country's largest refinery, Salina Cruz, was offline for months as Pemex sought to repair damages from natural disasters.

The company could import crude this year to feed its refineries. Pemex is “preparing infrastructure” in order to have the flexibility to bring in crude, most probably by tanker or rail, according to Murrieta. Imports could eventually account for up to five percent of the refineries' crude slate. Last year, Pemex processed almost 770,000 barrels a day of crude.

Pemex faces stiff competition from international companies such as Exxon Mobil Corp., Royal Dutch Shell Plc , Total SA and Glencore Plc , which are opening retail stations and plan to import fuel as part of Mexico's fuel liberalization.

“Now that we are returning to do the major maintenance that the refineries' need, we should see output reach 900,000 to one million barrels a day, depending on whether it is economically profitable” to raise run rates, said Murrieta. “We are trying to maximize the value of refining.”

 

Story by Amy Stillman from Bloomberg.

bloomberg.com / 02 01 2018

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels


 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved.
Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.