Mexican state oil company Pemex’s flagship oil refinery project (known as Olmeca) cost has more than doubled since 2019 to $18bn. The projected, budgeted at $8bn in 2019 is due to open a week from now and has significantly overshot the budget. As per sources, the cost of construction works through to 2024 rose to more than $14bn in May as the energy ministry signed the contract and the number of contracts has also risen from 100 to about 270. Olmeca aims to make Mexico self-sufficient in fuel, with the capacity to process 340k crude barrels per day, adding around 20% to its current capacity. Cost rises are likely to continue due to soaring inflation. Pemex’s balance sheet debt stands at over $108bn and is said to be the highest of any major oil company. Industry members and energy analysts have already raised c concerns over Pemex’s ability to increase fuel output due to factors like lack of plant maintenance and high debt.  

Pemex’s dollar bonds were trading slightly lower with its 4.625% 2023s down over 0.24 points to 97.25 yielding 6.98%.

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