Accidents at Deer Park, Olmeca refineries highlight ESG challenges at Pemex

Two accidents at refineries owned by Pemex, one in Texas and the other in the Mexican state of Tabasco have highlighted the scale of the challenge that Mexico's national oil company faces as it tries to reassure its ESG-focused lenders.

According to local media, a fire broke out in the naphtha reforming unit of the recently inaugurated Olmeca refinery in the port of Dos Bocas on Sunday. The unit was shut down and no-one was injured.

Olmeca is currently running at around half its nameplate capacity and is gradually ramping up operations to its full processing capacity of 340,000b/d of crude. The naphtha plant was designed and delivered by Samsung Engineering. 

On Tuesday the Deer Park refinery, which has been fully owned by Pemex since 2022 and which also has capacity of 340,000b/d, reported a diesel spill into the Houston shipping channel.

In recent years, Pemex has reported serious accidents and fires across its upstream, midstream and downstream operations. 

In April, a Pemex employee died and several contractors were injured after a fire broke out at the Akal-B offshore platform in the Gulf of Mexico.

Regular accidents and environmental incidents have alarmed lenders who are focused on ESG criteria. Pemex has financial debt of around US$100 billion and could face higher financing costs if it does not improve its ESG performance.

To meet lenders' concerns, at the start of this year Pemex launched its first ESG strategy, which includes plans to reduce the rate of injuries in its operations and eliminate fatalities, alongside environmental targets. 

According to the company's 2023 sustainability report, Pemex registered 1,219 leaks and spills last year, up from 1,167 in 2022. Of those incidents, 24% were related to gas leaks and 76% to oil spills. 

Last year, 11 Pemex employees and eight contractors died in accidents, according to the report.