Mexico City — The Organization of Petroleum Exporting Countries (OPEC) has congratulated the Mexican government for the construction of the Dos Bocas refinery, which will begin processing fuels this year, while the United States and Europe are reducing their oil refining capacity.
The oil cartel’s secretary general, Haitham Al Ghais, celebrated Mexico’s approach to crude oil refining, during a speech at the offices of the Energy Ministry in Mexico City on Thursday.
“I want to congratulate the Mexican government for the approach it is taking to have more refining capacity with Dos Bocas,” he said.
Dos Bocas, state-owned Pemex’s seventh refinery, has cost nearly $14 billion to build, as the budget soared past the original $8 billion that was earmarked, and has yet to produce fuels despite its inauguration in July 2022.
Mexican President Andrés Manuel López Obrador’s decision to increase the country’s refining capacity has been criticized by credit rating agencies such as Moody’s and Fitch, as well as by analysts and political opponents for being the only Pemex business that reports multi-million dollar losses in an environment of high oil prices.
The Mexican government expects Dos Bocas to start refining oil in July 2023.
The OPEC secretary general said that Europe and the United States have shut down “many refineries” and the only refining capacity that continues to increase is in Asia and the Middle East, but “it is not enough”.
North America has lost about 1.3 million barrels per day of refining capacity over the past three years, according to EIA data.
Three US refineries, the Phillips 66 Alliance complex, Shell’s Convent plant and the Calcasieu refinery, have closed since the beginning of 2020 due to multiple factors, including the impact of hurricanes, and LyondellBasell announced that it will close its refinery in Texas at the close of 2023, S&P Global said in a report.
OPEC estimates that the world requires annual investments of $500 billion by 2045 to avoid the decline of oil production, but some countries have decided not to invest.
He added that future demand will reach 215 million barrels of oil per day.
“Refining is a critical component for the entire value chain, we cannot see it in isolation, we have to see it holistically,” he said.
Mexico’s Energy Minister Rocío Nahle highlighted the role of oil and refining, as the 54 million vehicles in Mexico demand one million barrels of gasoline and diesel per day.