BASHAM NEWS

NATIONAL REFINING PLAN

NATIONAL REFINING PLAN

On December 09, 2018, Mexican President, Andrés Manuel López Obrador announced a new National Refining Plan which aims to reduce the high amounts of oil products and crude oil which are imported by Mexico.

López Obrador basis to announce this plan is mainly the fact, that as per government official numbers, Mexico is producing 1.8 million barrels of crude oil daily.

Among the announcements made by the Mexican President related to this plan are: (i) increase PEMEX investments in oil activities in approximately $75.00 billion pesos during 2019 (approximately USD $3.7 billion). This additional monies are expected to be approved by the Federal Congress during the discussions and approval of the Federal budget to take Congress during the discussions and approval of the Federal budget to take place during December 2018; (ii) construction of a new oil refinery in Dos Bocas, Tabasco State; (iii) aim to be self-sufficient in three years in connection with the oil products (mainly gasolines and diesel) that Mexico requires since as of this date Mexico, as per official government information, imports 75% of the gasolines and diesel it requires and only produces 25%; (iv) lower the costs of gasolines and diesel.

As per the announcement made by Lopez Obrador, tender procedure to award the contract for the construction of the new refinery is expected to take place on March 2019. is expected to take place on March 2019.

Additionally, Federal Government aims to increase oil production in approximately 2.4 million barrels of crude oil daily.

The plan announced by López Obrador to be implemented in part by PEMEX with the support of the Federal Government aim to strengthen such company by increasing its role in all activities related to the oil industry, including increasing oil production and its refining.

Additionally, the Energy Ministry, Rocío Nahle announced the following plans related to the National Refining Plan: (i) rehabilitation of the six existing refineries as to reach, by 2020, a of 600 thousand barrels of gasoline per day; (ii) Construction of the new refinery in Dos Bocas, Tabasco which is expected to have is expected to have a capacity for processing 340 thousand barrels daily.

With these objectives Mexican President seeks to decrease the import of gasolines and diesel from abroad and making and diesel from abroad and making Mexico a self-sufficient producer and consumer of of such products, while also aiming to increase the oil production capacity mainly from the State-Owned Productive Company, PEMEX.

Thelawyers of the energy, mining and infrastructure area of our firm are availablefor any questions or comments on the above. 

Sincerely

Juan Carlos Serra

serra@basham.com.mx

Jorge Eduardo Escobedo Montaño

jescobedo@basham.com.mx

Jorge Cobos Franco

jcobos@basham.com.mx

Jorge Campuzano

jcampuzano@basham.com.mx

Mexico City, December 12th, 2018