February 16, 2015 / 8:03 PM / 5 years ago

UPDATE 1-Mexico's Pemex to delay refinery upgrades due to low oil prices

(Adds quote, background on refinery and fuel projects)

By Ana Isabel Martinez

MEXICO CITY, Feb 16 (Reuters) - Mexico’s state-run oil company Pemex said on Monday it will delay execution of capital projects including major refinery reconfigurations and ultra-low sulfur fuel projects amid slumping crude prices.

“The (budget) adjustment is of sufficient size that the execution of the major projects is being deferred,” the company said in a statement, but gave no details or expected cost savings.

The statement noted the company’s board of directors last week approved cuts of 62 billion pesos ($4.16 billion), or a reduction of 11.5 percent compared to the budget authorized by Congress.

The company has previously said it would add deep conversion coking units to three of its six domestic refineries. The upgrades would boost refineries at Salina Cruz, in southern Oaxaca state; Tula, in central Hidalgo state; and Salamanca, in central Guanajuato state.

The three refinery upgrades were part of a $20 billion investment package that also included the cleaner fuels initiative.

Pemex, which is set to compete head on with private oil companies for the first time in decades following a sweeping energy overhaul enacted last year, is also renegotiating service contracts in an effort to cut costs, the statement added.

CEO Emilio Lozoya first mentioned plans to rework the terms of hundreds of millions of dollars’ worth of oilfield service contracts in December.

In September, the company said it would invest $2.8 billion to upgrade five domestic refineries to be able to produce ultra-low sulfur diesel designed to reduce air pollution. ($1 = 14.9140 Mexican pesos) (Reporting by Ana Isabel Martinez; Editing by James Dalgleish)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below