Mexico Oil Sector Accidents Raise Doubts About Deep Water Exploration

Reuters

MEXICO CITY, June 19 (Reuters) - As Mexico opens its energy market to more private investment, the country's drive to exploit untapped deepwater oil riches has raised safety concerns due to mounting accidents that have blotted the country's safety record.

The biggest Mexican oil refinery Salina Cruz has been offline since a fire broke out at the coastal facility on Wednesday following a tropical storm, the latest in a string of mishaps.

Violent summer storms have visited Mexico for years, but the country has very little experience in deep water drilling, a risky activity still marked by the 2010 Deepwater Horizon well blow out in the northern Gulf of Mexico that killed 11 people and pumped 5 million barrels of oil into the sea. That disaster prompted a rethink of safety measures in the United States.

As a result, U.S. operators now have on permanent standby a so-called capping stack that ultimately sealed the well, while third-party inspectors verify deepwater project safety.

Mexico, which awarded its first eight deepwater projects in a December auction, so far has none of these safeguards.

"All these companies are going into Mexican deep waters naked with none of the protections set up on the U.S. side," said George Baker, publisher of Mexico Energy Intelligence.

Industry executives and regulators say there is still time to ensure adequate protections are in place.

The first wells will be drilled as soon as 2019 and a second round of deep water blocks is due to be auctioned in December.

Carlos de Regules, head of Mexico's oil safety regulator ASEA, said companies beginning deepwater operations, like France's Total and China National Offshore Oil Corporation , already have clear rules to follow.

"The operators have to show they can react, contain and deal with the possibility of an out-of-control well," he said.

De Regules said ASEA aims to certify third-party inspectors in the next year, but noted it was up to companies whether they wanted to follow the U.S. capping stack model or create their own.

Leaving it up to companies may not be enough, said Miriam Grunstein, a Mexico City-based oil regulation expert. "It's up to (ASEA) to make sure the industry does it," she said.

Alberto de la Fuente, president of the AMEXHI association of Mexican oil producers, said emergency response firms such as Oil Spill Response have entered Mexico, and the industry is examining its options.

"I'm positive about what's been achieved, but we need to redouble our efforts," he said.

(Reporting by David Alire Garcia; Editing by David Gregorio)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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Ulises gomez | Jun. 20, 2017
I dont get it the oil producer association should be worldwide and push the countries to follow the safety alignments for every deep water project in order to avoid a natural disaster. We are on time its not enough with redouble efforts we need act before disasters happens, is not only about the money gents think and rethink double before star drilling ahead. Its our unique GOM aint no matter if is us side or Mexican side. Its a shame that Mexican government sell the Mexican crude oil (mezcla) in blocks on a bids when the entire oilfield is full of unemployed people and not matter if you are prepare or not foreign oil companies always come with is entire staff and the latest spots just are for the locals while the politicians and Goverment people living like a kings in a jungle of country this is so sad and so frustrated. Hopefully we listen and act before something happens in our GOM.


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