After four decades without having more of its own capacity to produce gasoline, Mexico took a step forward last week by acquiring the 100% of a refinery that is not in its national territory.
Deer Park is one of the 20 facilities with the largest capacity in the United States and one of the oldest (founded in 1929).
From 1992 was co-owned by the Dutch company Shell and the state company Petróleos Mexicanos ( Pemex ).
But The Mexican government launched a surprise offer to its partner this year, which received the go-ahead last week from the US government, which had to verify that there was no problem. emas of national security.
“It’s historic” , celebrated the president Andrés Manuel López Obrador when making the announcement on Wednesday.
“Now we are moving towards self-sufficiency. This will allow us, above all, to maintain low prices for gasoline, diesel, jet fuel and other oil products, because we have the capacity to process our raw material. That is the change in oil policy “, he pointed out.
His government is paying US $ 600 million to Shell plus other US $ 600 millions to settle debts.
Although the high efficiency of Deer Park will help to solve the deficit of fuel production in Mexico , which paradoxically it is a country oil , the purchase occurs at the same time as the world moves towards the substitution of oil for other energy sources.
“López Obrador wants to resume an economic development model that was successful in 1938. It is a completely different planet Earth “, says analyst Rosanety Barrios to BBC Mundo.
Other industry experts consider it to be a good decision in the short term, but they find contradictions in the speech of the government of seek energy sovereignty with a refinery located in another country .
“The Deer Park refinery is in the United States and López Obrador has always complained that Mexico depends on that of the United States. But it is not an unreasonable decision, in my view, “says Francisco Monaldi, director of the Latin American Energy Program at the Baker Institute of Rice University (Texas, USA)
What does Deer Park contribute?
The golden years of Mexico in the oil industry were left behind a long time ago.
The country ceased to be one of large oil exporters and lost fuel self-sufficiency for several decades. Currently it only has six active refineries, the last one opened in 1992 .
These refineries have numerous operating problems – according to López Obrador they were intentionally abandoned by the predecessor governments – so at present they only work at a third of their capacity .
Instead, Deer Park op e ra al 90% of its capacity , which is 340. 000 barrels of oil per day.
“It is integrated into Shell’s petrochemical complex in Deer Park, which makes it easier for many of additional gasoline, diesel and turbos products ina can be marketed in a very agile way and with much little in logistics because they are practically together “, highlighted the director of Pemex, Octavio Ramírez Oropeza.
The official stated that Deer Park, As it is located on the coast of the Gulf of Mexico in the Houston area, close to the borders and ports of Mexico, it reduces fuel transportation costs.
Why buy it? Is it effective?
Since the government took office, in 2018, López Obrador raised an energy model that favors the rectory of the State , a return to the model of the twentieth century, when Mexico emerged as an oil power.
Its strategy seeks to reverse the energy reform approved in 2013 which opened investments to private companies, as the president defends that his plan avoid dependence of the exterior and ensures sovereignty .
“We have more than 40 years without building a new refinery. Always because of the lie that it was not a business to do refining, that it was better to sell crude oil and buy gasoline. It is, as we have said many times in a metaphorical way, to sell orange to buy orange juice “, stated López Obrador when announcing the purchase.
One of its great infrastructure promises is the construction of the new Dos Bocas refinery, which will cost more than US $ 9. 000 million and will have the same capacity as Deer Park. Ensures that it will be in operation before the end of its mandate, in 2024.
According to analysts, López Obrador made the decision to buy Deer Park outside of his energy plan given the uncertainty of when the refinery will be ready de Dos Bocas.
“It will cost Pemex US $ 600 million dollars, half of the refinery you are buying, versus more than US $ 9. 000 millions it costs you Two Mouth. So it is seven or eight times cheaper in terms of the capacity they are buying, ”Monaldi points out, noting that building refineries in the Western Hemisphere does not is the best idea.
Although Deer Park can facilitate the Mexican government to cover the current demand for fuels, Rosanety Barrios warns that the government’s accounts are “very, very optimistic ”.
Currently, the country consumes 1, 43 million barrels of fuel per day. And its refineries, according to official data, generate little more than 863. 000 barrels per day. The others 675. 000 are purchased in the international market.
When the entire capacity of Deer Park is added, the country would exceed 1.2 million barrels, but would still be in the red with respect to demand.
The government’s bet is to add others 340. 12 when the Dos Bocas refinery go into operation and increase the production of the six that are already operating through modernization.
Neighborhoods, without e However, he points out that the government’s calculations are risky.
On the one hand, the analyst points out that it remains to be seen if the six Pemex refineries they can expand their capacity (something that he considers “practically impossible”) . And the government accounts must subtract fuel oil, a residue from refining whose value is very low.
Technical problems in Mexican refineries mean that a third of what it refines becomes fuel oil , so the government accounts do not close, according to Barrios.
Additionally, Deer Park already has contracts that it must fulfill, so there are no guarantees that the 100% of its capacity is destined for Mexico.
“This shows that the economic issue does not concern him . For him that is not relevant as long as he meets the political objective, “says Barrios.
Sovereignty and / or energy security
The energy policy of the president of Mexico evokes the oil nationalism of the 20th century that led the country to self-finance and create its main social works and infrastructure.
The president says that it is a “change of mentality” that the neoliberals reject.
“From the oil expropriation [una nacionalización de 1938] to the years 80, we were self-sufficient in gasoline, we did not buy. From the years 80 to date, we bought the fuels, that’s why they were not made the refineries “, says the president.
” So, turning again is a different policy that is being carried out at Pemex. And this means more work in Mexico, more independence. ”
For the analyst Adrián Duhalt, the decision “strengthens, at first glance, the objective of increasing the production of petroleum products by Pemex.” But he points out that energy security and sovereignty are parallel objectives that may not be met.
“The first implies having access to energy inputs constantly at competitive prices, while the second, such as President López Obrador has expressed it, he aims for Mexico to produce what it consumes “, he explains.
” In practice, it is hard for me to think that the purchase of the Deer refinery Park supports the issue of energy security since oil products such as gasoline and diesel are only part of that concept “.
And the fact that Deer Park is in the United States does not add to López Obrador’s idea of having sovereignty in the production of fuels.
On the other hand, countries with advanced energy industries are already taking steps towards the energy transition : substituting polluting sources such as oil for others more “green”. Shell’s decision to sell Deer Park is part of that company’s journey.
Mexico, with the construction of Dos Bocas and the purchase of the Texas refinery, remains in the oil policy even though it has signed international commitments to reduce pollutants.
“We have an energy model that in addition to causing economic losses in state companies, The cost of energy is rising and completely leaves aside the whole issue of the energy transition , ”says Barrios.
“Mexico is going to require clean energy and the best prices to take advantage of the Free Trade Agreement and increase its exports. Mexico is an exporting country, a manufacturing and exporting country. So, in order to take advantage of what we have and maximize them, we need two things: cheap and clean energy and private investment ”.
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