Innumerable controversies surround Mexico’s Dos Bocas oil refinery project. But its Energy Minister Rocio Nahle said in a Radio Broadcast that the refinery will undeniably be constructed despite stockholder condemnation. Mexico hopes this plan will bring it closer to energy independence by lessening its reliance on refined product purchases from the United States.
The plan has drawn criticism from investors who estimate that the factual price of the refinery is between $10 billion and $12 billion. Making it billions more than the $8 billion that Mexico is ready to assign for the refinery. The original plan was to use foreign firms including foreign knowledge and proficiency in oil refining course to complete the 340,000 container per day for refinery. Mexico had even invited Technip, KBR, Bechtel & Tec hint, and Worley-Parsons & Jacobs Engineering Group to bid. But the bidders quoted sums much higher than the $8 billion as Mexico had expected. Above it, all bidders said they can not meet the completion deadline for the project i.e. 2022.
Mexico decided to ignore this and has gone ahead with severely indebted Pemex at the helm. Pemex’s refining capability has seen its facilities running merely at 40% ability, which actually is a drop from 75% between 1990 and 2013. It has also offered Pemex a $7 billion tax break over three years to benefit the refinery fund.
By default it has affected the country’s imports. There is a reduction in the amount of crude oil the country has imported for refining for five years- from 1.2 million barrels per day in 2013 to just 600,000 barrels per day in 2018. Thus its internal gasoline manufacture has fallen. This has led to the need to import finished gasoline and mixing components to reimburse the loss.
