OPEC Visits Mexico

On March 9, 2023, Haitham al-Ghais, Secretary General, OPEC, visited Mexico for the first time since 2016, as he met with President López Obrador and Rocío Nahle, Mexico’s Minister of Energy to discuss energy security and self-sufficiency. OPEC comprises 16 countries and seven observers, including Mexico. 

López Obrador shared on Twitter that he and al-Ghais understood each other. Nahle highlighted al-Ghais’ participation at a conference, where the oil executive stated that OPEC respects energy self-determination. Al-Ghais underlined Mexico’s role in OPEC, pointing it out as a key player in the market. He also congratulated the government for its investment in Dos Bocas.

Al-Ghais talked about the importance of the oil industry for energy security and highlighted that global demand will increase by 23% by 2045 as the population grows. He said that Mexico is key in this scenario, especially with its increased refining capacity with the construction of the Olmeca refinery. “The entire demand cannot be met with just one source of energy, therefore all energy sources are required to complement each other,” said al-Ghais.

When oil prices started to deflate over the last months of 2022, al-Ghais addressed the need to secure the energy supply for the next decade. He emphasized the importance of investment in oil to meet future energy needs while also calling for climate policies to be balanced and fair. Similarly, US president Joe Biden acknowledged the need for oil for at least another decade.

Despite OPEC’s recognition of Mexico’s refining investments, the country continues to report lackluster refining results. The Olmeca Refinery in Dos Bocas has received billions more in funding than initially predicted but has not come online yet. Recently, the government approved MX$47.234 billion (US$2.362 billion) more for the refinery’s construction. President López Obrador defended that the cost of the refinery will be US$11.65 billion, still over the original US$8.918 billion budget. However, according to sources like Reuters, the refinery’s costs amount to MX$313 billion (US$15.65 billion), a 75% increase from the original budget.