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Despite Fierce Opposition, AMLO Says Dos Bocas Refinery Is a Go


Mexican President Andrés Manuel López Obrador. Photo: http://www.presidencia.gob.mx

By RICARDO CASTILLO    

It was a heyday for all the neoliberal journalists who not only question but will try to tear to pieces any project the still-new administration of Mexican President Andrés Manuel López Obrador (AMLO) comes up with.

As informed by Pulse News Mexico last on Friday, May 10, Energy Secretary Rocio Nahle García decided to declare the construction budgets presented by energy plants construction companies KBR, Bechtel-Techint and Worley Parsons-Jacobs a “deserted tender” for the Dos Bocas refinery in the southeastern state of Tabasco.

Immediately afterwards, AMLO announced that it would instead be built by Pemex engineers supervised by the Energy Secretariat under the aegis of petrochemical engineer Secretary Nahle herself. All work, AMLO reiterated on Monday, May 13, will begin on June 2.

Across the Mexican media, you could read negative opinions about the “already-failed project,” as well as the terms by which Nahle said she would carry it out. She said that it was be delivered on time in May 2022, within the allotted budget of $8 billion with appropriate construction oversight.

AMLO and Nahle are paying no heed to criticism and going ahead with their stated construction plan. On Wednesday, May 15, the state-owned oil company Petróleos Mexicanos (Pemex) will be holding another board of directors meeting summoned by Nahle to bring to concretion the financing plans and proposed capitalization of the new Pemex outlet PTI Infrastructure Development to replace the failed bidders.

The fact that these companies will not be at the helm of the Dos Bocas project, however, does not mean they may not participate in partial building packages. Nahle also announced that she will soon launch a new invitation to construction companies which may be willing to adjust themselves to the new course of action.

The Monday press was also full swing, besides issuing opinions, on publicizing hearsay. There are many claims – in fact too many to not pay attention – that in order to meet the goals set by the government, AMLO will have to downsize his plan to construct first just one mini-refinery that will be able to produce an average of 50,000 barrels per day (bpd) of fuels – gasoline and diesel. At present, the Dos Bocas project is slated to produce about 340,000 bpd. in two different refining plants, each producing 170,000 bpd.

Needless to say, at the Mexican Petroleum Institute (IMP), there is a lot of excitement. For the first time in the past 40 years the IMP is being taken into consideration. Under his now-defunct Energy Reform, former Mexican President Enrique Peña Nieto also attempted to dismantle the IMP, which was founded in 1963 to support Pemex with fresh talent.

Now the IMP, which boasts thousands of idle oil engineers in its research rosters, is definitely the source from which the so-called Dos Bocas Plan B will feed for qualified personnel to bring down investment costs. Many of these specialists will participate as buyers for the company particularly, in terms of purchasing higher cost equipment, which takes more time for factory delivery.

Current IMP Director Marco Antonio Osorio, however, has a different budget from that of AMLO, and previous to last week’s tender rejection of the international companies, he made public the IMP’s budget proposal for the project of $14,740 billion. Back then, there had been no talk about downsizing the Dos Bocas construction.

Another thing that can be said about the IMP oil and petrochemical engineers is that there is a lot of them (I don’t have the exact figures as to how many) and are already on Pemex’s payrolls.

Things still remain to be defined, but Mexico’s Energy secretary and the president both want to outsource part of the construction plans to Mexican companies. At least four candidates to participate are now being mentioned.

Through the remainder of the month of May, we’ll be getting trickled down information as to what is being done. What is certain is that things are changing, but without taking into consideration the opinion of columnists who prognosticate terrible things like that the Pemex and the nation will go into bankruptcy due to the Dos Bocas Refinery construction.

Many of these journalists, AMLO alleges, are cranking the payola (“el chayote”) with his political enemies, which are not just a few. AMLO was elected by a landslide of 53 percent, but there was another 47 percent of the vote that was badly splintered. These opponents are teasing the political coals.

Be that as it may – everyone is free to have their opinion in Mexico – the reality is that AMLO is going to go full-speed ahead and build Dos Bocas – perhaps even a downsized model which will be open to later additions – and, for now, the press moguls both on the print and television media may twist and shout, but their voices will not be heard over the affirmation of his project.

Dos Bocas will be the signature work of the AMLO administration. Now the challenge for Pemex will be meeting timing, budgetary and quality commitments.

 

 

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Categories: energy, Mexican politics, Mexico, Opinion, PoliticsTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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