The Dos Bocas refinery will not be ready during AMLO's six-year term: sources

The Dos Bocas refinery will not be ready during AMLO's six-year term: sources The construction of the Olmeca refinery in Dos Bocas, Tabasco, has become a hot topic in Mexico, not only due to its magnitude and cost, but also because of the significant delays it faces. Despite the inauguration carried out by President Andrés Manuel López Obrador in July 2022, the expectations that the refinery will be operational before the end of his term are fading, according to sources close to the process. With a processing capacity of 340,000 barrels per day and a cost that has soared to around $16.8 billion, the Olmeca refinery has become a symbol of Mexico's quest for energy self-sufficiency. However, the reality is that construction works have faced multiple obstacles, leaving the responsibility of making the refinery operational to López Obrador's successor, Claudia Sheinbaum, when she assumes the presidency on October 1. Despite previous claims that the refinery would be fully operational in July, sources familiar with the operations have revealed to Reuters that this scenario is unlikely. The complexity of connecting the different parts of the refinery, such as the catalytic cracking plant and the hydrodesulfurization plant, has proven to be a considerable challenge that will require months of additional work. The lack of tangible progress has become evident, contradicting previous optimistic statements by Pemex officials. The reality is that the refinery is not able to produce commercially viable fuels at present, raising doubts about the impact of these delays on public finances and the country's energy strategy. The focus on refining, rather than exploration and production, has been criticized by independent experts, who believe that Pemex should have invested in more profitable areas. The delay in the construction of the Dos Bocas refinery also raises concerns about the haste with which the project is being carried out and the alleged exaggeration of progress for political reasons, causing unease in the markets. Mexico's dependence on fuel imports, despite being a major oil producer, has been a recurring issue that this refinery project aimed to address. However, the technical and logistical obstacles pointed out by the sources consulted cast doubt on the feasibility of achieving energy self-sufficiency in the short term. As the country continues to import diesel and gasoline, delays in the Dos Bocas refinery could have long-term consequences on the Mexican economy. With a cost much higher than initially estimated, the refinery represents a challenge for both Pemex and the government as a whole, testing their ability to fulfill campaign promises in the energy sector. In this context, the future of the Dos Bocas refinery and its impact on Mexico's energy industry remains uncertain. The urgency to address pending issues and meet the objectives of producing commercially viable fuels will be a key challenge for Claudia Sheinbaum's incoming administration and for the state-owned Pemex, in a scenario marked by technical complexity and unexpected setbacks that have characterized this project so far.