Mexico's Oil Production Crashes As Fire Platform Fire Kills 5

A fire that broke out at a Pemex oil platform this Sunday during maintenance killed five workers and injured another six, Pemex said in a press release, adding that two people were missing.

The platform where the fire erupted is part of a gas-processing hub in the Campeche Bay. Its outage as a result of the fire has reduced Pemex's production by some 444,000 bpd. The natural gas processed at the Ku-Maloob-Zaap center is used to boost oil production from offshore fields, Reuters noted in a report citing a Pemex document. As a result of the fire, production fell from 719,000 bpd to 275,000 bpd.

Pemex, in turn, made a note of pointing out in its press release that the fire had not erupted because of insufficient investments in maintenance. The government has increased Pemex's maintenance budget, the company said, adding that the safety of its employees remained a top priority, over oil production.

"There is not a problem of lack of investment, there is not a problem of lack of resources," chief executive officer Octavio Romero told the media. "The oil industry is a risky industry. We have had accidents, which in numbers are less than in previous years."

This is the second fire at a Pemex platform for the past two months. The first one occurred in early July. The company said at the time that the fire was caused by a gas pipeline leak and a lightning storm. The location of the blaze was once again the Ku-Maloob-Zaap complex.

Pemex has been struggling to reverse a continuous decline in production, but the task has proved challenging, not least because of its financial troubles. The Mexican state-owned company is the most indebted oil producer in the world despite generous government help. Recently, Pemex was awarded the controversial operatorship of the largest new find in the country, the Zama field, but the company lacks sufficient funds to develop the field's reserves.

By Charles Kennedy for Oilprice.com

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