Mexico President Announces Start of Work on $8B Refinery

Mexican President Andres Manuel Lopez Obrador has officially launched the US$8 billion construction of an oil refinery, affirming that the history of large-scale corruption scandal named Odebrecht won't repeat itself in this development project.

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"Zero intermediaries, zero traffic (of influences), zero bribes, zero of any of that," he said at the Inauguration Ceremony at Dos Bocas, adding that "I have asked union leaders to behave, corruption is over."

The huge project, inaugurated Sunday, aims to boost Mexico's state oil company Pemex and provide economic stimulus to the country's impoverished south. "We will build it in three years at a cost of 150 billion pesos (US$8 billion). No doubt about it!" the leftwing president said.

A group of foreign firms selected by the government was first granted the tender to build the Dos Bocas oil refinery in southeastern Tabasco state - where Lopez Obrador was born.

The tender was canceled when the firms put forward completion dates and budget estimates greater than those demanded by the president.​​​​​The government then gave the project to the oil company Pemex.

Once completed, it would allow Pemex to process some 340,000 barrels of crude per day and deliver 170,000 barrels of petrol as well as 120,000 barrels of diesel.

Lopez Obrador said the refinery was needed to break Mexico's dependence on foreign gasoline imports - some 70 percent of what it uses - and would be a boost for growth for the south, which is the country's poorest region.

"It is time for the southeast to work for the benefit of all - that's where the natural resources are and where the petrol is," he said, adding the construction is an "act of justice" towards that part of the country.

Pemex currently has six refineries which - because of a lack of investment - operate at less than one-third capacity.

Energy minister Rocio Nahle said refining oil was a "good business" and that if the refinery operated correctly, the investment could be made back in four to five years. He added "all care has been taken" regarding the environment, following complaints no impact study had been carried out and mangroves would be destroyed in the construction area.

Meanwhile, Lopez Obrador announced the plan to combat fuel stealing, known as 'huachicoleo,' on Dec. 27, saying that such theft costs the state more than US$3 billion every year.​​​​​​​ Last week, Mexico's Attorney General’s office issued an arrest warrant for Emilio Lozoya, former chief executive officer of the state-owned oil company, Pemex.