Energy Secretary Nahle and Pemex boss Romero will build new refinery. Energy Secretary Nahle and Pemex boss Romero at this morning's press conference.

Government will build new refinery; bidders’ estimates too high: AMLO

Lowest bid would have been US $10 billion, $2 billion more than budgeted

The federal government has scrapped the bidding process for the new oil refinery in Tabasco on the grounds that the bids were too high and the project would take too long.

Instead, the state oil company and the Secretariat of Energy (Sener) will build the refinery at Dos Bocas, President López Obrador said today.

Speaking at his morning press conference, López Obrador declared that the tendering process for the project was “void.”

Four companies – Bechtel-Techint, WorleyParsons-Jacobs, Technip and KBR – were invited by the government in March to offer bids to build what will be Mexico’s seventh refinery.

The president said their estimates ranged between US $10 billion and $12 billion – the government had estimated US $8 billion – and that none of the companies would commit to completing the project within three years.

“. . . They exceeded US $8 billion and the [requested] construction time and we’re not going to do any project that we can’t finish during the six-year term,” López Obrador said.

“. . . Only one [company] committed to finishing it in 2023 and that doesn’t give us security, another [said] 2025,” he added.

“. . . The refinery will be built with the coordination, management and supervision of Petróleos Mexicanos [Pemex] and the Secretariat of Energy,” López Obrador said.

Energy Secretary Rocío Nahle will be in charge of the project, and it will also be supported by the state-owned Mexican Institute of Petroleum, he explained.

The president said that construction will commence on June 2 to have the refinery ready for operations in May 2022.

Priorities for the government will be to complete the project in three years, stay within the budget of US $8 billion and ensure that the facility complies with international standards for quality and energy efficiency, the secretary explained.

“As president of the Pemex board . . . I have the authority to coordinate and promote the construction project of the Dos Bocas refinery, and also to establish the technical guidelines in the contracting processes and guarantee that time, cost and quality goals are met,” Nahle said.

Pemex CEO Octavio Romero said that about 50 billion pesos (US $2.6 billion) will be invested in the project this year.

The company’s oil production has been declining for years, a factor that has contributed to debt in excess of US $100 billion.

López Obrador says the new refinery will help Mexico reduce its reliance on imported petroleum.

However, an analysis published by the Mexican Institute for Competitiveness (Imco), a think tank, showed that the Tabasco refinery only has a 2% chance of success.

Source: El Financiero (sp), Milenio (sp) 

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