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U.S. Shale Drillers Cautious Despite Record Earnings

U.S. Shale Drillers Cautious Despite Record Earnings

U.S. shale drillers are publishing…

Mexico's Energy Minister Hits Back At Refinery Criticism

The new Dos Bocas refinery that Mexico’s government is building to reduce the country’s dependence on fuel imports is “being built in record time. Opinions around the world are very positive,” according to energy minister Rocio Nahle.

Bloomberg reports that the energy minister was responding to media reports that the Dos Bocas project was plagued by cost overruns and delays. According to the reports, the refinery is running $3.6 billion over budget, and delays could mean that the flagship project of Mexican President Andrés Manuel López Obrador may not start operations this year and not even in time for the state oil firm’s plan to end oil exports in 2023 and focus on refining fuel domestically.

Mexico plans to suspend all crude oil exports next year as part of the president’s plan to increase local fuel production and reduce imports. The export phase-out announcement was made by the chief executive of Pemex, Octavio Romero, in December. He also said that Mexico would reduce oil exports from next year by more than 50 percent, to 435,000 bpd.

Currently, Mexico is the third-largest oil exporter in the Americas after the United States and Canada, according to data from the U.S. Energy Information Administration. There are already doubts the government would be able to afford to suspend crude oil exports despite growing domestic fuel demand, which motivated the plans to boost local refining, including by building a whole new refinery.

The Dos Bocas refinery will have a capacity of 340,000 bpd and will cost some $12.4 billion, according to calculations from last year, when Pemex warned the refinery could end up costing 40 percent more than initially expected. That was a revision from the original $8 billion price tag that Pemex said the project would have in 2020. That original was then revised to $8.9 billion and then to $12.4 billion.

By Irina Slav for Oilprice.com

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