Analyst: Pemex's Pipeline Faults Expose Lack of Authority

Recent industrial accidents plaguing Mexico's state oil company Pemex are exposing the company's lack of centralized authority responsible for industrial safety and environmental protection, according to energy analyst George Baker. "It's not just [about] how many barrels spilled, or why did this particular pipeline break, but what fault lines are exposed by the event," the Houston-based analyst told BNamericas in Mexico City.

"There is no central authority in Pemex responsible for pipelines." He attributed the lack of central authority to the 1992 reorganization of Pemex into four units - Gas, Exploration and Production (PEP), Chemicals and Refining - with each one in charge of its own pipelines. This left an oversight vacuum that is contributing to the current lack of maintenance, Baker said. "So when this pipeline breaks, the first question we can ask is, who is responsible for maintenance of this pipeline, and is there anybody in the corporate office that is responsible for this pipeline?" he said, adding that only last May Pemex's board voted to eliminate the corporate vice presidency of industrial safety and environmental protection.

Meanwhile, Pemex's CEO Luis Ramírez Corzo called on the four division leaders to develop safe and environmentally friendly operating practices and for all Pemex employees to adhere to them. After meeting with environmental, health and other Pemex officials in Veracruz state to discuss ways to beef up industrial security and environmental protection in Pemex Refining, Ramírez urged the company's workers, technicians and administrators to take environmental protection and industrial safety seriously. Ramírez wants to implement more rigorous safety standards, not only to prevent accidents but also to ensure the preservation of facilities and the environment, he said. "Negligence will not be permitted," Ramírez said.

Over the past few months several spills and accidents in Veracruz have sent thousands of people to shelters and put hundreds of fishermen out of work. The cause is lack of maintenance leading to corroded and leaky pipes, experts say, and Ramírez has called for US$3bn investment over six years to bring pipelines up to a safe standard.

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