Pemex petchem blast casts doubt over new investments
Wednesday's explosion at the Pajaritos petrochemical complex (pictured) in Mexico's Veracruz state, which left 24 workers dead and eight still missing, is the second major accident at a Pemex plant since November and deepens already latent safety concerns at the state oil company's facilities.
The cause of the explosion at the chlorine plant, operated by Pemex and Mexichem, has yet to be determined. Nineteen workers remain hospitalized, 13 of whom are in a serious condition. The two companies have pledged to conduct a thorough investigation into the blast.
Foreign and local investors could be deterred from the country as a result of the accident, as it places the security of their capital in doubt, an economy ministry official said.
"There were people who were going to install themselves in that area where the complex is located today, and we hope they understand it was just an accident and that they continue to invest," José Antonio Mansur Beltrán was quoted telling the Formato Siete news portal.
The accident could not come at a worse time for Pemex, however, as tanking oil prices have led to a US$5.5bn budget cut for this year. The company has also received a US$4.2bn cash injection from the government to shore up its liquidity after reporting US$9.6bn losses in 4Q15.
The incident raises safety concerns as the oil firm is courting investment into its midstream and downstream sectors, as the country's energy reform allows for greater private sector participation in the country's oil and gas and electricity generation and transmission sectors.
The reform requires the implementation of unified safety standards in the electric power and oil and gas industries, Horacio Fajer, the country manager of local firefighting equipment manufacturer Kidde, said in a podcast in February.
He highlighted the risk of explosions and fires, particularly in transmission and distribution infrastructure, as well as combined cycle power stations.
Pemex is also awarding contracts to upgrade its refineries, investing around US$500mn in upgrading the Salina Cruz refinery in Oaxaca state as part of its strategy to reduce diesel sulfur content from 500 to 15ppm.
Switzerland-based Foster Wheeler was awarded a contract in October 2014 to build an ultra-low sulfur diesel plant at the refinery.
Pemex announced in November that it had reduced the number of accidents at its installations over the previous year. In its 2014 sustainability report, the NOC claimed to have slashed accidents by 33% in 2014 to 0.38 per million man-hours, saying the rate is below the international average for the industry.
That same month, however, eight workers were injured in a fire at the Salina Cruz refinery, two of whom were Pemex employees, while the remainder were external contractors.
The Salina Cruz fire followed a similar incident at Pemex's Tula refinery last September. The fire broke out in sector No. 1 of the refinery and left one worker injured.
On the same day, a power outage on its Safe Regency platform caused it to drift and collide with another vessel in Campeche sound. No workers were injured in that incident.
Last June, a fire broke out aboard the Akal-H platform, although no injuries were caused to workers.
An oil platform explosion in early May was the second in a month and killed two workers. In April, four people were killed and another 16 injured when a fire ripped through an offshore platform following an explosion in the dewatering and pumping area of the Abkatun Permanente platform.
And in August 2014, three workers died as a result of a flare-up at the Francisco I. Madero refinery in Tamaulipas state, while in June seven workers were killed after falling from a cage being hoisted from a Pemex offshore drilling platform under construction in the port of Tampico.
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