Pemex trumpets discoveries, US$23bn downstream investment

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Wednesday, December 9, 2015

Mexico's Pemex has announced shallow, deepwater and onshore hydrocarbons discoveries, adding reserves of 1Bboe, as well as a US$23bn downstream investment package that includes refinery upgrades and co-generation projects.

Sixty percent of the additional reserves correspond to shallow water, 35% deep water and 5% onshore, the state oil firm's CEO, Emilio Lozoya Austin (pictured), said at an event at Tula Refinery on Tuesday in the presence of President Enrique Peña Nieto and energy minister Pedro Joaquín Coldwell.

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Lozoya Austin said Pemex had invested 35bn pesos (US$2bn) this year in the exploration that led to the discoveries, and which would boost total 3P reserves by 85%, reversing the company's declining oil production over the last two years.

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A total of 60,000 jobs will be created as a result of the projects, he said.

Lozoya Austin also announced an initiative to produce ultra low sulfur gasoline at six refineries in the country with a US$3.1bn investment, resulting in production of more than 210,000b/d, and which would slash the country's greenhouse gas emissions.

The investment includes the construction of a de-sulfurizing plant at the Tula refinery with a 30,000b/d capacity.

Some US$3.9bn will be invested in ultra low sulfur diesel production at six refineries, with the construction of 19 new plants.

Investment in ultra low sulfur gasoline production at the Tula refinery alone will total US$250mn and create 4,000 jobs, Lozoya Austin said.

Investment in Tula will total US$770mn, with work planned to start in January.

An 11.5% budget cut earlier this year had put Pemex's planned refinery upgrades on hold.

Pemex had announced in January that it would refit the Salinas Cruz refinery in Oaxaca and extend the state's natural gas pipeline network as part of a US$20bn upgrade plan, which included the reconfiguration of the Tula and Salamanca refineries and low sulfur diesel and gasoline plants.

Pemex will also invest almost US$5bn in reconfiguring the Tula refinery, increasing its crude oil processing capacity by 25,000b/d to 340,000b/d, making it the country's largest production capacity refinery, the company's CEO said.

Some US$8bn will be invested in the reconfiguration of the Salamanca and Salina Cruz refineries that, along with the Tula refit, will create 46,000 jobs.

Pemex is also developing four co-generation projects with a US$3bn investment at the Tula, Cadereyta and Salina Cruz refineries, and at the Cactus gas processing plant in the state of Chiapas.

Such projects will increase Pemex's energy efficiency and allow for a 7Mt/y reduction in CO2 emissions, Lozoya Austin said.