22 | SEP | 2019
The firms bidding to build Mexico's new oil refinery have a dark past
Officials said they expect the facility to be built in three years- Photo: Henry Romero/REUTERS

The firms bidding to build Mexico's new oil refinery have a dark past

19/03/2019
13:14
Newsroom & Agencies
Mexico City
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“The companies we are calling upon for the Dos Bocas refinery are the best in the world,” López Obrador said earlier on Monday

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Mexico invited several international firms, including three U.S. companies, to bid on the construction of a USD $8 billion oil refinery, officials said on Monday, as President Andrés Manuel López Obrador seeks to fast-track one of his signature projects.

The facility would be owned by Mexico’s national oil company, Pemex, becoming its seventh domestic refinery, and built near the Dos Bocas port on Mexico’s southern Gulf coast. It is intended to help wean the country off growing fuel imports, a major campaign promise made by López Obrador.

At an event commemorating the 1938 nationalization of Mexico’s oil industry, Energy Minister Rocio Nahle said that those invited to submit bids will include two consortia with American companies: U.S.-based Bechtel with Italy’s Techint, and Australia’s WorleyParsons with U.S.-based Jacobs Engineering Group. Two sole bidders were also invited: U.S.-based KBR and France’s Technip.

“The companies we are calling upon for the Dos Bocas refinery are the best in the world,” López Obrador said earlier on Monday, prior to unveiling the names of the firms.

“We will be efficient and at the same time avoid corruption,” said the President.

Officials said they expect the facility to be built in three years, the first oil refinery to be built in Mexico in the last four decades.

Nahle said the refinery has already been granted all required government permits, nevertheless, Mexico’s oil safety regulator, ASEA, fined a contractor in January for clearing a protected mangrove from the site without the proper permits.

Nahle said the facility will include 17 processing plants and 93 storage tanks, as well as access to highways, a rail line, and docking for ships.

López Obrador favors a more state-centric energy model and has been critical of the previous government’s constitutional reform that ended Pemex’s decades-long monopoly. The reform opened the door to private fuel importers, as well as allowing new foreign and private gasoline and diesel brands to enter the market.

Pemex is set to spend USD $2.5 billion on Dos Bocas in 2019, which aims to be able to process 340,000 barrels per day of heavy crude. That processing capacity would make the new refinery Pemex’s biggest.

The refinery has to be built in three years, the personnel has to be Mexican, and it will have at least 50% of national participation.

Nahle said the project will create 23,000 direct jobs and 100,000 indirect jobs.

Nevertheless, it has been revealed that three of these companies invited to bid on the construction of Mexico's new refinery have a dark past. In the U.S., Bechtel has been accused of receiving contracts for the reconstruction of Iraq, after being favored by former President George Bush. The company was also investigated for the collapse of the Big Dig tunnel in Boston, it later reached an agreement and paid USD $458 million.

In 2017, the Italian company Techint was accused of bribing Brazilian officers. The company was also involved in the Unaoil network, led by the Ahsani family, who has corrupted the international oil market for two decades.

The Wall Street Journal revealed that in 2004, KBR charged a premium of USD $61 million, through a Kuwaiti company, when it sold crude petroleum to soldiers deployed in Iraq.

The project will be monitored by the Public Affairs Ministry in order to prevent irregularities and corruption.

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