Pemex to build $8bn Dos Bocas refinery as government scraps tender

The Government of Mexico has announced that state-owned firm Pemex will build the Dos Bocas refinery in the Port of Dos Bocas, Tabasco.

The move is contrary to the previous plans of getting the 340,000 barrels per day (bpd) refinery built by foreign firms with expertise in handling similar projects.

In a press conference, Mexican President Andres Manuel Lopez Obrador stated that the tender to construct the project becomes void as the foreign firms did not meet the requirements for the tender.

In March, the government launched a bid for the construction of the refinery. Two consortia and two sole parties were invited, Bechtel and Techint; WorleyParsons and Jacobs Engineering Group; KBR; and Technip.

Obrador said that bids submitted exceeded the $8bn budget estimate for the refinery. Another key reason was that the bidders could not agree to the government’s deadline of completing the project by 2022.

The president has entrusted the job of constructing the project to Pemex and Mexico Energy Ministry will supervise the project.

The government expects construction to begin next month, with completion targeted for 2022.

The proposed refinery is projected to have a processing capacity of 340,000bpd of heavy crude.

Pemex is reeling under heavy debts, largely caused by losses made by the company’s refining division. The debts are valued at more than $106bn, reported Reuters. The firm’s refining facilities currently run at less than 40% of capacity.

During the first quarter, the company’s revenues reduced by 10.4% to Mex$356.3bn ($18.63bn) from Mex$397.4bn ($20.78bn) in the corresponding period last year.