Experts Say Pemex Puts Lives at Risk over Maintenance Failures

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According to data from Mexican Congress’ approved budgets for Petróleos Mexicanos (Pemex), the state-owned gas company could be putting the lives and wellbeing of its employees and the populations residing near Pemex drilling sites at risk due to a lack of continual maintenance within the company’s infrastructure.

While figures from 2018 show 17.26 billion pesos in budget approved for the infrastructural maintenance of Pemex’s production of crude oil, gas, petroleum products and petrochemicals, that number was nearly slashed in half by 2022, when the Mexican Congress reduced the upkeep budget to 9.28 billion pesos.

With more than 124,000 workers across Pemex’s line of business – not to mention the hundreds of thousands of people living in communities near Pemex’s drilling sites – the lack of maintenance financing could have undue repercussions on the Mexican society and economy at large by putting them at risk, say sector experts.

“These dangers are reduced depending on corrective maintenance (change of equipment due to failures) and preventive maintenance (the same equipment is repaired),” said energy sector analyst Ramsés Pech. “Much (of Pemex’s machinery) has already exceeded its useful life. Failing to upkeep equipment can increase Pemex’s operating cost between 20 percent and 40 percent due to accidents and incidents that are reflected in the company and in the lives of people and company assets.”

Pemex’s track record in dealing with these upkeep issues has not been consistent: Following the company’s “A1 critical risk attention index,” only 33.6 percent of these identified A1 critical risks were solved in 2020, diving to only 10.3 percent in 2021.

“Work has been done to address critical risks, incorporating and following up as part of the strategy, including mitigation plans to reduce associated risk and impact. However, because there are still lags in the solution to this problem, it is necessary to reinforce the mechanisms used to address and resolve the needs associated with this problem,” said the Pemex Board of Directors during its 2021 evaluation, noting the progress still need to be made.

Part of this can be attributed to Pemex critical risks being classified as confidential information since 2019, due to the company’s close ties with Mexico’s economy. As such, the true impacts of limited maintenance budgets are unknown to Mexico unless a true catastrophe takes place, much like July 2021’s oceanic fireball that caught headlines across the world.

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