Deadly Fire at Pemex Platform Cuts Oil Production by a Quarter

Deadly Fire at Pemex Platform Cuts Oil Production by a Quarter

A fire at a Petroleos Mexicanos platform left five dead and cut the oil giant’s production by about a quarter as it mounts a search for missing workers and scrambles to repair the damage.

The blaze on the E-Ku-A2 platform in the Gulf of Mexico, off the state of Campeche, forced Pemex to shut down 125 oil wells and slash overall production by 421,000 barrels a day. Chief Executive Officer Octavio Romero said there’s no date yet for resuming output, but that it could take days, and exports will “surely” be lower this month. 

“We hope that between today and tomorrow we’ll have sufficient electricity to enable the wells to return to production,” Romero told reporters Monday.

The fire is a severe blow to the state producer, which has stepped up efforts to reverse a decade and a half of declining production and is struggling under the highest debt burden of any major oil company, at $115 billion. 

The disaster comes on the heels of a fire near the company’s Ku-Maloob-Zaap cluster of offshore fields due to a gas leak from a marine pipeline. The enormous blaze in the sea last month drew international attention and criticism from activist Greta Thunberg and U.S. Senator Bernie Sanders.

The production outage caused by the latest platform fire may affect supplies to Gulf refiners, which depend on Mexican oil for 38% of the foreign crude they process. Fuel makers including Valero Energy Corp, Phillips 66 and Chevron Corp. are among the largest US buyers this year, according to data compiled by Bloomberg.

Inquiries have increased for Canadian and Colombian heavy crudes that compete with Mexican Maya to supply Gulf refineries, although no deals have been closed, according to traders.  

An electricity generator is being transported to the platform to allow the company to reactivate wells. 

Romero said that the fire has nothing to do with the maintainance of the platform, and said that the accident happened during revision works. A search for two missing workers is underway and Pemex will conduct a full facilities inspection, the CEO said. Six workers with burn injuries are being treated in nearby hospitals.

Investors were unfazed by the news as Pemex bonds maturing in 2050 climbed 0.25 cents on the dollar to 93.69, though they pared gains made earlier in the day.

©2021 Bloomberg L.P.