Earthquakes and Contract CancellationsBy Peter Appleby | Thu, 06/25/2020 - 17:21
With Mexico and the global oil industry still in the grips of the COVID-19 crisis, PEMEX has chosen to cancel some of its exploration and production contracts with service providers. A powerful earthquake damages a PEMEX refinery, piracy activity off the Mexican shores and organized crime plague stakeholders.
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PEMEX has decided to cancel service contracts with several companies while delaying the payment of amortizations until next year. This decision, taken on the back of the global price crash and dwindling sales at the pump, will hurt local companies. The NOC remains by far the country’s largest player and many thousands of companies depend upon it. Business owners and industry stakeholders will be furrowing their brows and crossing their fingers as the crisis’ impact spreads.
PEMEX’s Salina Cruz refinery in Oaxaca was forced to suspend its work for several hours after the 7.5 magnitude earthquake that struck the southern state of Oaxaca caused a fire in one of the refinery’s turbo generators. Firefighters moved to put out the fire quickly and PEMEX reported via Twitter that little damage had been done. One person was treated for minor wounds. The same refinery was forced to close its doors for four weeks in 2017 after the catastrophic September 19 earthquake that claimed the lives of 370 Mexicans nationwide.
An abandoned car with “12 explosive devices” was found by authorities after assailants had failed and then fled from the Salamanca refinery. The incident, which took place in Guanajuato, is a stark reminder of the security issues the industry is facing in Mexico. Piracy threats are also growing in the Bay of Campeche and criminals, knowing that state security institutions are stretched, appear to be getting bolder.