Mexico’s state-owned oil company Pemex is seeking private partners for three major refinery upgrades that will allow it to convert more heavy crude into higher-value fuels like gasoline, a company executive declared on Tuesday November 17th.
Pemex estimates required investment for the construction and installation of coking units at its Salina Cruz, Tula and Salamanca refineries at $12.3 billion.
“We think these projects can be completed by means of partnerships with third parties,” said Juan Marcelo Parizot, Pemex’s head of marketing for its newly-created Industrial Transformation division.
“The goal is to assimilate the best operational and management practices,” he said, adding that partnerships would share risks and rewards as well as lower the amount of capital that Pemex would have to invest upfront.
Like most large oil companies, Pemex has seen its revenues slide dramatically as crude prices plunged by more than half since last year.
The additional three coking plants would allow Mexico, which increasingly produces heavy crude, to generate more valuable fuels like gasoline and diesel, and fewer barrels of less-desirable fuel oil.
Parizot said the projects would eventually increase fuel production by more than a fifth, while improving profit margins by about $6 per barrel of crude oil processed.
He declined to say what kind of partnerships Pemex would employ for the refinery upgrades, or when the projects might be tendered.
Due to lack of sufficient domestic capacity, Mexico currently covers about half of its gasoline needs through imports.
(Reporting for Reuters: David Alire Garcia and Adriana Barrera; Editing by Tom Brown)
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