Dos Bocas’ Construction Costs Increase

Costs for the construction of PEMEX’s Dos Bocas Refinery have increased by US$900 million so far. In other news, a fire broke out at the NOC’s refinery in Salina Cruz causing losses of around US$5 million.

Here are this week’s biggest stories in Oil and Gas!

Mexico

Dos Bocas’ Construction Costs Increase

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Dos Bocas, the new PEMEX refinery that is currently under construction, saw its costs increase to US$9.8 billion, US$900 million more than initially estimated. The higher costs came about because of extensions to the project, said Minister of Energy, Rocío Nahle.

When the project was originally announced, its estimated cost was US$8 billion, although experts warned that this was impossible, as they projected extra expenses ranging between US$4 billion and US$6 billion.

Fitch Ratings’ Report for Mexico Warns Of Spending Cuts

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Fitch Ratings warned that although the income from crude oil exports will increase Mexico’s GDP by 1.1 percent this year, the revenue will be eaten to sustain the government subsidies on fuel. Therefore, it is unlikely that the country will achieve the fiscal target of 3 percent Non-Financial Public Sector (NFPS) fiscal deficit. Instead, spending cuts may be required to reach the fiscal deficit set by the administration.

Is the Gas Tank Graveyard a Ticking Time Bomb?

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The former 18 de Marzo refinery and current PEMEX distribution facility on the border of the Manuel Hidalgo and Azcapotzalco boroughs in Mexico City has become a dumping ground for thousands of gas cylinders. Since November last year, thousands of worse-for-wear gas cylinders have been taken off the streets and moved to the makeshift storage facility near the neighborhoods of San Diego Ocoyoacac, Huichapan and Torre Blanca. For locals, the gas tank graveyard is a cause for major health and safety concerns.

Fire Sets PEMEX’s Salina Cruz Refinery Ablaze

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Local authorities reported on Saturday that a fire, which had been going for 24 hours at the Antonio Dovalí Jaime oil refinery in Salina Cruz, Oaxaca, was finally brought under control. While a full investigation into the accident is yet to take place, initial reports indicate that the fire started because of a technical error in the distribution channel of a vertical tank, with a capacity of 10,000b of processed gasoline.

Refinery Fire Leads to Losses, Causes Yet Another Safety Incident

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According to PEMEX workers, the fire reported on Saturday at the Antonio Dovalí Jaime refinery in Salina Cruz, Oaxaca, caused economic losses of around MX$100 million (US$5 million). The incident marks yet another safety incident for the state oil company.

Subsidies at the Border Resume But Exclude Tijuana

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On April 2, Mexico’s government revealed that the policy that subsidized gasoline would stop applying between April 2 and 8 near the US border due to shortages caused by more Americans driving south to avoid higher fuel prices. However, after only three days of suspension, authorities announced that the subsidy would be reinstated in all 40 border municipalities, except for Tijuana, one of the world’s busiest border crossings, and Playas del Rosario.

International

India Increases Crude Oil Processing

Processing of crude oil in India, the world’s third biggest exporter and consumer of oil, has increased 6.4 percent year-on year since March to 5.28MMb/d.

Last Russian Crude Oil Shipment Reaches US Coast

US refiners received the last shipment of Russian crude oil before the trade embargo goes into effect on April 22, with nine tankers arriving in Louisiana. 

Russia and Saudi Arabia Agree on Closer Oil Sector Cooperation

Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman agreed to closer cooperation, as the leading OPEC+ nations seek to stabilize the currently volatile oil market.