ULSD to be pushed back

Might be equals. Until a few years ago Pemex had some mothballed petrochemical plants. When the plants closed the workers continued to go to the job site and do nothing. Their contract said they must be paid in full! Many of the workers assist the cartels in the cutting of pipelines. But worse than the management and unions is the Gov. themselves who continue to drain all the profits.

Moisheh

I'd be willing to bet corruption and fraud in administration and management costs far more than anything a union might.

Maybe if Pemex got rid of the corruption and that horrible union they would have the $$ to do the upgrade!

Moisheh

UPDATE 1-Mexico's Pemex to delay refinery upgrades due to low oil prices
Mon Feb 16, 2015 3:01pm EST
By Ana Isabel Martinez

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

" The cuts will include delays in a number of refinery upgrades, reductions in spending, and some layoffs. "

http://www.reuters.com/article/2015/02/16/mexico-pemex-idUSL1N0VQ0LR20150216

Better ??

darbone85737 wrote:
http://www.wsj.com/articles/pemex-to-postpone-some-deep-water-exploration-ceo-says-1424280590

The article says nothing about USLD.
This topic title is totally off-base.

MEXICO CITY—Mexican state-owned oil company Petróleos Mexicanos will likely postpone some unstarted deep-water exploration projects as a result of the drop in oil prices and its recently announced budget cuts, Chief Executive Emilio Lozoya said Wednesday.

In an interview with Mexico’s Radio Fórmula, Mr. Lozoya said Pemex is aiming to keep to a minimum the impact the cuts will have on exploration and production.

However, some exploration projects in deep waters of the Gulf of Mexico could be delayed, he added.

Pemex will make around half of the $8.3 billion in federal government budget cuts this year. The cuts will include delays in a number of refinery upgrades, reductions in spending, and some layoffs.

“There are exploration projects in some deep-water fields, not all of them, but the higher-risk ones where if we haven’t started they will be postponed,” Mr. Lozoya said. He didn’t specify any fields.

Before the government opened bidding of oil and gas blocks to private companies under new energy laws passed last year, Pemex was assigned about 83% of the country’s proven and probable reserves, and about a fifth of prospective, or undiscovered reserves.

They include areas where Pemex is already producing oil and gas, and a number of deep-water deposits. Pemex has made some deep-water discoveries, but doesn’t have any commercial production from the fields.

The drop in oil prices and budget cuts are an opportunity to lower costs, Mr. Lozoya said, adding that with oil at $100 a barrel, costs for large plants and deep-water projects almost doubled in the past four years.

The new energy laws also allow Pemex, for the first time, to form joint ventures with private firms to develop projects, which could lower the state company’s capital needs. Mr. Lozoya said Pemex has average crude oil production costs of $23 per barrel, which makes its projects highly profitable even with oil currently around $50 per barrel. Therefore, Pemex expects to be able to bring on board private partners, who would put up capital, he added.

Write to Anthony Harrup at anthony.harrup@wsj.com

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