Dos Bocas to Be Profitable in 20 Years: PEMEX

The Dos Bocas oil refinery, the flagship project of the Mexican government in the energy sector, will be profitable in 20 years, revealed a PEMEX executive. The project moves forward toward production, but concerns remain regarding its capability to reach production targets.

In July 2019, the then Minister of Energy, Rocío Nahle, stated that the Internal Rate of Return for Dos Bocas would be 13.46%, a percentage she deemed high.

Dos Bocas has a budget of US$16 billion, according to the PEMEX Board of Directors, up from the initially defined US$8.9 billion by President Andrés Manuel López Obrador. Ruíz Monjaraz explained that the initial cost of the refinery only included plants and tanks, but additional necessary infrastructure - power plant, gas pipeline, aqueduct, and roads - was under the control of other federal institutions. Moreover, the COVID-19 pandemic raised costs. In the absence of action from other entities, PEMEX proposed absorbing the costs.

Dos Bocas, the seventh PEMEX refinery located in the municipality of Paraíso, Tabasco, will produce 290Mb/d, 170Mb/d of gasoline and 120Mb/d of ultra-low sulfur diesel, to be sent to three marine buoys. These will load ships bound for various ports in the country, such as Tuxpan, where the petroleum products will be sent to meet the demand of the Valley of Mexico.

President López Obrador stated that the project will begin commercial gasoline production no later than Nov. 2023. Despite optimistic projections, skepticism lingers among experts and PEMEX insiders regarding the refinery's ability to meet its production targets by the end of the year.?

During the president's fifth Government Report, he commended the MX$70 billion rehabilitation efforts across Mexico's six refineries, the acquisition of Deer Park, and the construction of Dos Bocas. Renovations to the National Refinery System (SNR) have led to a notable increase in fuel production, climbing from 38% to 60%, according to a public report. These accomplishments are hailed as a significant stride toward realizing Mexico's energy self-sufficiency goals.