Experts wonder whether investing in the Olmeca refinery was a big mistake or a decision that could bring benefits to the country. CFE announced the partnership with TC Energy to build an extension to the Tuxpan underwater pipeline to Coatzacoalcos, amongst other projects.
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The construction of the Olmeca refinery in Dos Bocas, Tabasco has been one of President López Obrador’s key commitments ever since he entered office. Even before its opening, the mega-infrastructure project had been criticized, as many experts consider heavy investment in fossil fuels to be unsustainable as other governments around the world are trying to replace polluting hydrocarbons with cleaner energy sources. However, there are several strong arguments to be made in favor of the refinery.
PEMEX and state electric utility company CFE reported the development of four key infrastructure projects, requiring an investment of US$12.5 billion. The largest project is to be developed by CFE and Canada-based TC Energy, which have signed off on a US$5 billion alliance to build a 420km extension to an underwater natural gas pipeline going from Tuxpan, Veracruz state. This will feed a planned liquefaction facility located at the port of Salina Cruz, Oaxaca.
In Coatitila, a small town in the state of Veracruz where the average worker earns US$6.40 a day on average, the opportunity to participate in the UK-based oil giant BP’s program CO₂munitario was met with enthusiasm. However, locals have spoken out against the program, alleging they have not been paid fairly for their work. The IOC said it is working on the issue.
The US Treasury warned that oil prices could rise 40 percent to around US$140/b if a cap on Russian oil prices is not achieved. According to experts, the objective is to establish a price that covers Russia's marginal production costs so that it continues to export oil. However, the price must not allow Russia to make significant profits that could help finance the war against Ukraine.
OPEC expects oil demand to increase by 2.7MMb/d in 2023, a slower pace than in 2022. OPEC explained that the growth will be due to the improvement in geopolitical events, economic growth and the containment of COVID-19 in China, which will boost oil consumption.