Dos Bocas Starts Operations

President Andrés Manuel López Obrador announced that the refinery started production on September 1st and Rocío Nahle, Minister of Energy, shared the production of the first bottle of fuel at the refinery. However, the refinery still faces challenges before it is fully operational.

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Dos Bocas’ Refining Advances

During his fifth Government Report, López Obrador announced the start of operations at the Dos Bocas refinery, a key component of Mexico's energy self-sufficiency plan. The refinery is expected to contribute significantly to fuel production by year-end, although delays have created uncertainty. López Obrador emphasized the rehabilitation of Mexico's refineries, the purchase of Deer Park and Dos Bocas' construction as steps toward energy self-sufficiency.

Dos Bocas Refinery Faces Production and Cost Challenges

Mexico's Dos Bocas refinery is projected to produce approximately 170Mb/d of gasoline and 120Mb/d of ULSD, according to Nahle. However, experts and sources within PEMEX express skepticism about achieving this target by year-end. López Obrador had previously stated the refinery would produce 290Mb/d of gasoline alone by year-end. The project has faced cost overruns, with the initial budget doubling.

PEMEX Revenues Plunge 21.4% in July

PEMEX continues to face challenges on its path to profitability, falling short of its revenue goals for July. Factors impacting results include falling oil prices and lower domestic refinery processing. Revenues in July reached MX$393.2 billion (US$22.9 billion), a real annual decline of 21.4%, marking the sharpest contraction since 2008. Domestic refinery processing dropped to 768.732Mb/d, well below the government's target of 1MMb/d. While PEMEX has increased processing capacity since 2018, it still falls short of meeting Mexico's fuel demand, leading to substantial fuel imports.

Lozoya Exempt From Agronitrogenados Case

A judge suspended the case against former PEMEX Director Emilio Lozoya in the Agronitrogenados case, where he was accused of receiving a US$3.4 million bribe. However, Lozoya remains detained for the Odebrecht corruption case. The judge's decision is based on an agreement reached with Alonso Ancira, accused of bribing Lozoya, which required him to pay US$216 million in compensation. This agreement is deemed to cover Lozoya's involvement as well, leading to the suspension of charges against him.

CRE Authorizes 47 Fuel Station Permits in Mexico

CRE approved 47 permits for the dispensing of oil products at service stations. These include permits for low-consumption gas stations aimed at serving small towns and hard-to-access areas. Mexico has around 1,000 zones where such stations could be profitable. CRE has seen a surge in permit approvals, with 433 expected to be approved by November, the highest in five years, signaling changes in the fuel distribution landscape.

Deer Park Faces Challenges Toward Fuel Self-Sufficiency

Despite the 100% acquisition of the Deer Park refinery by PEMEX in January 2022, less than 10% of its production has been sent to Mexico as of June 2023, according to López Obrador's fifth Government Report. To strengthen this strategy, efforts are underway to implement new logistical routes. PEMEX executives acknowledge that additional infrastructure is needed for the refinery to increase its supply to Mexico.

PEMEX to Send Crude to Deer Park

PEMEX is exploring strategies to optimize crude oil supply to its Deer Park refinery in Houston, Texas. The evaluation involves the Yúum K’ak’naáb Floating Production Storage and Offloading vessel and Dos Bocas Maritime Terminal. The aim is to streamline operations and enhance crude supply to the refinery. This initiative aligns with PEMEX's goal to redirect 100% of Deer Park's production to Mexico by H1 2024, as noted in López Obrador's fifth Government Report.