Government Promises to Start Refining at Dos Bocas
President López Obrador defended its hydrocarbons and refining policy at his morning conference and promised the Dos Bocas Refinery will start refining in July 2023 following a delayed construction. López Obrador also attributed the “obvious” setbacks to the construction’s size.
Additionally, the president assured that the government will keep working towards achieving energy self-sufficiency by maintaining investment for the rehabilitation of other refineries. He said that when Dos Bocas’ Olmeca operates at full capacity, it will contribute 340Mb/d of refined products. He also stated that the coker units at Tula will be ready by the end of the administration in 2024. Along with the Salina Cruz coker unit, they will refine fuels like gasoline and diesel. “The two plants require investments of US$10 billion. We will finish the one in Tula and leave it producing. We plan to obtain 30Mb/d of gasoline from it,” he said.
López Obrador also highlighted the Deer Park purchase, saying it turned out to be a great decision since the US refinery is already yielding a return on the roughly US$1.5 billion investment. It already exports part of its production to Mexico, too. Despite advancements in Mexico’s energy goals, the government’s plan to achieve self-sufficiency by 2023 no longer appears to be in reach, as analysts point out that Mexico needs better energy planning for the long term.
Furthermore, Rocío Nahle, the Mexican Minister of Energy, promised the country will start refining in Dos Bocas on July 1, 2023. Nahle had previously delayed the launch of operations at Dos Bocas to December 2022. The minister also discussed the modernization of the National Refining System (SNR) to contribute to Mexico’s energy independence.
To foster Mexico’s energy self-sufficiency, President López Obrador instructed PEMEX to decrease crude oil exports and increase refining, as opposed to the previous administration that decided to decrease processing in the SNR, a move that made sense financially but increased Mexico’s dependence on US refineries. Turning around this former strategy proved to be a complicated and costly operation for the president, and outdated refineries ended up producing more polluting fuel oil than the desired diesel and gasoline.
Despite the recent increase in refining, the use of the installed refining capacity is at one of its lowest points since 2012. In addition, the NOC’s refining subsidiary lost US$7.37/b during 3Q22, PEMEX refineries are expected to continue registering low levels of production because the construction of the Olmeca refinery at Dos Bocas and the two coking units at the refineries of Tula and Salina Cruz are not expected to be completed in the short term.