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Oil Prices Lag Despite Early OPEC Cuts

Oil Prices Lag Despite Early OPEC Cuts

OPEC already started cutting crude…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

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Pemex To Pick A Partner For Its $2B Coking Plant

Refinery

Pemex will pick a partner to complete a $2 billion coking plant at the Tula refinery by the end of October, according to sources from the government-run company that spoke to Reuters exclusively.

Officially, Mexican refineries should be processing 1.6 million barrels of crude per day, but irregular maintenance and outdated equipment have caused refineries to stagnate production at 915,000 bpd.

The October timeline gives Pemex four more months to find its partner for the coking facility. A previous June deadline passed without word on the future of the project “because of the complexity and the investment needed,” an industry source said. Bank of America’s Merril Lynch is helping Mexico pick the partner firm.

Pemex has invited 56 companies to submit bids for the project, which will not be offered on an official tender, but instead in a process that is “open, competitive and transparent,” Pemex said. The selected companies should submit bids by the third week of August, so that Mexico can determine a shortlist by the end of September.

Reuters previously listed the countries interested in the project as of April: Japan's Mitsui & Co., Korea's SK Group, Italy's Eni, China's PetroChina and Sinopec, British-Dutch Royal Dutch Shell Plc, and U.S. oil major Chevron.

Adding a coking facility will boost output of high value fuels, such as gasoline, from Mexico’s heavy crude grades.

The Mexican government wants its two other large refineries, Salamanca and Salina Cruz, to benefit from similar upgrades via private sector partnerships as well.

The key facilities have fallen victim to rough weather in recent weeks. Last month, Pemex said torrential rain caused by tropical storm Calvin flooded various areas of the 330,000-bpd Salina Cruz refinery in Oaxaca. It later restarted the refinery at full capacity, but one worker died and nine others were injured in the debacle.

By Zainab Calcuttawala for Oilprice.com

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