Mexico Scraps Consideration of Outside Bids for New Refinery; Pemex will Oversee Construction

Mexican President Andres Manuel Lopez Obrador said on Thursday that they will no longer be considering private sector suiters for the project, opting to allow Pemex to oversee the construction of the new oil refinery instead. This is a turn from the original announcement made in March. 

In a morning news conference, Lopez Obrador said that firms invited to bid had found the $8 billion price tag and three-year deadline unrealistic, while Pemex had seen it as doable.  

The U-turn is a fresh setback for the president’s five-month-old administration, which had touted its decision to turn the refinery over to international firms with a proven track record of completing similar projects elsewhere.

“Today’s decision will worsen Pemex’s outlook because it commits resources to projects that are not the most profitable,” said Pablo Medina, a Houston-based oil analyst with Welligence, calling the three-year timeline “really, really optimistic.”

Reporting by Diego Ore; Additional reporting by David Alire Garcia, Marianna Parraga, Daina Beth Solomon, Noe Torres and Ana Isabel Martinez; Editing by Dave Graham and Jeffrey Benkoe