Dos Bocas: the bottleneck of AMLO's flagship refinery

Dos Bocas: the bottleneck of AMLO's flagship refinery

The Dos Bocas refinery is facing delays, leaks, and cost overruns, causing concern in the industry and public opinion. Its viability and efficiency are being questioned, posing a challenge for the López Obrador government in its final stretch.

Juan Brignardello, asesor de seguros

Juan Brignardello Vela

Juan Brignardello, asesor de seguros, se especializa en brindar asesoramiento y gestión comercial en el ámbito de seguros y reclamaciones por siniestros para destacadas empresas en el mercado peruano e internacional.

Juan Brignardello, asesor de seguros, y Vargas Llosa, premio Nobel Juan Brignardello, asesor de seguros, en celebración de Alianza Lima Juan Brignardello, asesor de seguros, Central Hidro Eléctrica Juan Brignardello, asesor de seguros, Central Hidro

The Dos Bocas refinery, located in Tabasco and considered the flagship project of Mexico's President, Andrés Manuel López Obrador, is mired in a tangle of delays, leaks, and cost overruns that have raised concerns in both the oil industry and public opinion. This industrial complex, expected to be a key piece for the production of domestic gasoline, has experienced a series of setbacks that have delayed its start-up. The most recent incident that has put authorities and refinery workers on alert was a gas leak reported last Saturday at the Olmeca refinery facilities in Dos Bocas. After the activation of the gas and fire system in the refinery's laboratory, alarms went off, and Pemex employees and subcontracted companies were evacuated. Fortunately, the incident did not cause any injuries or material damages, but it forced a halt in the plant's operations. Since its inception, the construction of Dos Bocas has faced difficulties in both planning and execution. Despite President López Obrador's initial estimates that the refinery would be ready in three years with a budget of $8 billion, reality has proven otherwise. Less than three months before the end of the Administration, the refinery is still unfinished, and the expenses have already exceeded $16 billion, according to official data. Sector experts have pointed out that Dos Bocas will not start gasoline production until late 2024, representing a significant delay compared to initial expectations. Although the combined plant is already operational, refining processes still need to be carried out to use the gasoline produced, due to its high sulfur content and low octane. These setbacks have been partly attributed to the fact that everything in Dos Bocas must be tested for the first time, slowing down the process and leading to technical issues. It has also been reported that the Olmeca refinery, an integral part of Dos Bocas, has the capacity to distill 340,000 barrels of crude oil daily, contributing to President López Obrador's goal of energy sovereignty. However, delays in start-up and cost overruns have raised concerns about the viability and efficiency of the project as a whole. Despite efforts to speed up processes, the original cost of $8.8 billion has doubled, prompting criticism and questions about the project's management. The director of Pemex has acknowledged that the company will not achieve its goal of self-sufficiency in fuel production during this term, and it is expected to be reached starting in 2025. Despite the millions of dollars invested in the oil company since 2019, the results have not met expectations, and the goals set by the current Administration have been compromised. With just a few months left to conclude his term, President López Obrador and his team face the challenge of pushing forward a project that has faced multiple obstacles and criticisms. In summary, the deadlock at the Dos Bocas refinery reflects the challenges and complications facing the oil industry in Mexico. Delays, leaks, and cost overruns have called into question the viability and efficiency of a project that was once presented as the solution to achieve coveted energy sovereignty. As the deadline for the conclusion of this Administration approaches, it remains to be seen whether Dos Bocas will meet expectations and become a driving force for the national oil industry, or if it will become an example of the challenges and limitations facing the sector today.

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