News Article

Neglected Oil Giant Seeks to Regain Former Glory

Thu, 07/18/2019 - 11:14

Although exploratory activities in the 1970s strengthened Tabasco’s position as an oil-producing state, the end of the oil boom in the 1990s relegated the state to a neglected position in the federal development plan. Now, Tabasco seeks to regain its position and become Mexico’s energy capital mainly through one of President López Obrador’s flagship projects: the Dos Bocas refinery in the Paraiso municipality.

Closing the first day of Mexico Oil & Gas Summit at the Sheraton Maria Isabel hotel in Mexico City, José Antonio de la Vega, Minister for Energy Development of the State of Tabasco, outlined his administration’s strategy to take Tabasco back to its leading position in the oil and gas industry. “Our goal is to become a key center for oil production and an oil development model for all kinds of fields – onshore, shallow water and deepwater,” he said.

According to de la Vega, Tabasco is still an important player in the oil and gas scene. Out of the 111 areas adjudicated through bidding contracts to private companies, 39 are located in Tabasco. The state expects direct investment of US$1.7 billion and de la Vega highlighted projects from leading oil and gas players ENI, Hokchi and Talos Energy as success stories for the state’s oil and gas development. From the public sector, Tabasco expects to receive part of the MX$50 billion (US$2.6 billion) budget that PEMEX will destine for E&P activities in 17 fields, most of which are located in the state.

However, the big opportunity will come from the construction of the Dos Bocas refinery in the Paraiso municipality. “The project will require an investment of MX$150 billion (US$7.9 billion), will generate 100,000 jobs and will have a capacity for 340Mb/d,” said de la Vega. Conditioning of the Dos Bocas port has already started and de la Vega said six packages have already been tendered for the construction of the refinery, all of them won by foreign companies except for one won by ICA in collaboration with Fluor.

De la Vega expects the refinery will bring better days for Tabasco and said the government is already preparing for related investments in terms of infrastructure, real estate, water and waste management to support the project, including a bypass for the city of Paraiso. The state government also has the priority of fighting corruption, boosting social development and solving the security issues hindering private companies’ and PEMEX’s development.

At the same time, there is a project to develop the port Frontera between Dos Bocas and Ciudad del Carmen to boost oil and gas trading activities, as well as serve shallow and deepwater oil rigs in the area. “The state government is already in talks with PEMEX to advance this project. Refineries will require hydrocarbons that are not currently produced by PEMEX, which means we need investment in ports to ensure the energy sovereignty sought by the government,” said de la Vega.

Tabasco is also aware of the changes in energy and sustainability strategies. “Even though hydrocarbons are a bet for the state, we cannot deny that new technologies are the future in terms of efficiency and environmental development,” said de la Vega. The state is considering other projects in wind, hydraulic, biomass and solar energy that can lead to the generation of 2,000MW. “We want to accompany President López Obrador in the transformation of the southeast into an empire of progress and development,” he said.