May 24, 2019
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Mexico has resources to build Dos Bocas oil refinery, president says

Mexico City, Mar 12 (efe-epa).- President Andres Manuel Lopez Obrador said Tuesday that Mexico had the resources needed to build the Dos Bocas refinery in Tabasco state, refuting statements from the finance secretary cited by the Financial Times.

"We have 50 billion pesos (about $2.6 billion) for the refinery. We do have a budget," the founder and leader of the leftist National Regeneration Movement (Morena) said during his daily press conference at the National Palace.

Finance and Public Credit Secretary Arturo Herrera told the FT that the refinery's groundbreaking was delayed so that more capital could be injected into state-owned oil giant Petroleos Mexicanos (Pemex), allowing the energy company to increase production.

Lopez Obrador, for his part, said it was "very likely" that on March 18, the 81st anniversary of the oil industry's nationalization, contracts for the refinery project would be put out to bid.

"There are no delays, we're doing really well and the refinery is going to be built," the president said, adding that his administration would ask the UN to monitor the bidding process to prevent corruption.

A week ago, Lopez Obrador said that credit rating agencies were punishing Mexico and state-owned companies, such as oil giant Pemex.

On March 4, Standard & Poor's downgraded its outlook for the Federal Electricity Commission (CFE) from "stable" to "negative," the same rating it has for Petroleos Mexicanos (Pemex) and Mexican sovereign debt.

Lopez Obrador was an ardent opponent of the energy industry overhaul carried out by President Enrique Peña Nieto, who governed Mexico from 2012 to 2018, contending that the reforms deprived Pemex of much-needed resources.

Peña Nieto opened the oil industry to private investment, ending Pemex's control over the sector.

The move to end Pemex's monopoly, in place since the company was created in 1938 as part of then-President Lazaro Cardenas's nationalization of the oil industry, was a thorny issue in Mexico because the state-owned firm had long been a symbol of national sovereignty.

Lopez Obrador, who lost to Peña Nieto in the 2012 election, organized a campaign to try to stop the oil industry overhaul, but the effort failed.

Since taking office, AMLO has made Pemex one of his administration's priorities.

Lopez Obrador launched an all-out fight against fuel theft, deploying thousands of police and troops to increase surveillance of pipelines.

Stealing fuel from pipelines owned by Pemex and re-selling it on the black market has become a major criminal enterprise in Mexico.

This form of theft cost Mexico some $3.4 billion last year, according to official figures.

The administration also adopted a change in Pemex's method for shipping gasoline and diesel from refineries to urban distribution centers, opting to transport more fuel via tanker trucks instead of pipelines.

That modification caused severe supply problems in some states and Mexico City for several days.

Even though gasoline theft is still continuing on a lesser scale, the supply problems have been mostly alleviated.

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