By RICARDO CASTILLO
For a “misunderstanding,” the initiation of the construction of the Dos Bocas port refinery was surely a noisy one. But then, it only helps to deepen the polarization of Mexican President Andrés Manuel López Obrador (AMLO) and his multiple detractors, mainly international rating companies concerned about the state-run oil company Petróleos Mexicanos’ (Pemex) huge debt of $95.6 billion dollars as of the end of February, making it the world’s most-indebted oil corporation.
The “misunderstanding” began on Monday, March 11, when the British newspaper The Financial Times published an interview with Mexican Treasury Undersecretary Arturo Herrera, who told reporters Jude Webber and Jonathan Wheatley that the $2.5 billion budget slated this year for laying the foundations for the Dos Bocas refinery would be better put to use if invested in prospecting and drilling.
The approximately three-year construction of the refinery at Dos Bocas is slated to have a total cost of between $7 billion and $8 billion. Herrera said the construction would not be authorized until investment estimates were reduced and that the slated $2.5 billion go into exploration and production at the existing six Pemex refineries, currently working at a notoriously low capacity, forcing Mexico to import fuels from the United States.
Apparently, Herrera had promised a group of international financial institutions operating in Mexico the refinery would be “postponed” until the final 2019 budget had been clear. President AMLO, however, contradicted what Herrera told The Financial Times reporters, and said that on Monday, March 18, he will lay the cornerstone for the construction of the Dos Bocas refinery.
The British paper published a subsequent article questioning the credibility of the Mexican Treasury officials, to which AMLO replied on Wednesday, March 13, that “there is no confrontation and much less a contradiction, we are a team.”
In the Mexican press, many columnists have claimed Herrera was unhappy with the president’s decision to go ahead with the Dos Bocas refinery construction. Several newspapers forecast that he may resign at any time. Herrera, for now, is keeping mum.
“We’re going to finish (the refinery) in three years, to use all the oil produced in the Campeche bay and in the inland oil fields of the states of Tabasco and Veracruz,” AMLO said. “We will refine all that oil at Dos Bocas.”
Since 1979, Dos Bocas (which literally translates to “Two Mouths,” referring to the bay’s two land coves) has been the storage and distribution point of crude Campeche Sound’s now-diminished oil production.
In spite of AMLO’s denial of any misunderstanding or disagreement with his financial experts at the Treasury Secretariat, the nation will have to shell out $30 billion over the next three years on the credit line which was exponentially increased by former President Enrique Peña Nieto, who now stands accused of trying to lead Pemex into bankruptcy, both through pumped-up credits and by allowing thieves to have a heyday stealing fuel. Indeed, Peña Nieto did not lift a finger to stop the massive fuel theft that went on during his six years in office.
AMLO opposed Peña Nieto’s “Energy Reform” since it was first paraded to the Mexican people in 2012, consistently accusing his predecessor of spurring corruption at Pemex. In his bid for the presidency, AMLO ran on a platform that included finding a way to salvage Pemex from “the mafia in power,” whose greed, he said, was “a bottomless pit.”
For AMLO, Pemex’s debt says it all. During his address on his first 100 days in office on Monday, March 11, López Obrador said that he was committed to pulling Pemex out of the hole and having it grow by 40 percent in relation to 2018. He added that 50 billion pesos ($2.5 billion) had been set aside for the Dos Bocas refinery construction, which he said will welcome private investment.
“We have the budget and it is highly likely that next March 18 we will make the announcement the opening of tenders,” AMLO said.
In New York on Wednesday, March 13, Energy Secretary Rocío Nahle announced before a group of investors that, in tandem with the construction of the Dos Bocas facility, the administration is looking into revamping the six existing refineries in hopes of increasing production from the 30 percent Peña Nieto was churning out to at least 70 percent over the next three years.
The real phenomena that most people don’t seem to understand is that while international rating companies have nothing vested in Pemex’s success, AMLO’s popularity within Mexico is increasing steadily, and reached 80 percent this past week.
The president will on Monday, March 18 — which is Mexico’s Oil Nationalization Day, commemorating the 1938 repossession of oil fields from foreign companies — reaffirm his promise to heal Pemex and turn it into a profitable venture.
He took the first step to reach that goal last December, when he shut off fuel ducts to a mass of oil thieves and successfully put the Armed Forces in charge of guarding the “property of the people.” That was a start which is already saving money to the government.
Now comes the Dos Bocas refinery construction inauguration, which will surely spark international clamor for its “unviability” while pumping up AMLO’s popularity among Mexicans even further, which is, after the end game, what he cherishes the most.