Integration Summit Moves Forward on Plans for Refinery

April 20, 2007

CAMPECHE, Mexico – The Presidents of five Central American nations, Mexico and Colombia agreed here recently to adhere to their plan to build a regional oil refinery in Central American under the framework of the Plan Puebla-Panama (PPP) integration effort, despite the fact that Mexico City has reduced its initial offer to supply crude to the facility.

The leaders who attended the summit expressed their agreement to continue forward with regional integration of infrastructure by building highways and linking telecommunications and electricity grids, among other things.

Although the refinery would belong to the Mesoamerican Energy Integration Program, (PIEM), in which the Dominican Republic is also a member, the proposal was the key feature of the April 10 summit held in the Mexican city of Campeche, particularly due to the pressure of the Central American nations who are anxious to host it.

The oil refinery proposed under the legal framework of the PPP is one of three oil refineries that are now planned for construction in Central America.

The other two are in Panama and Nicaragua, where Venezuela’s President Hugo Chávez has promised a $2.5 million refinery to be built within the next two years.

Nicaraguan President Daniel Ortega did not attend last week’s PPP summit.

Mexican President Felipe Calderón announced at a press conference at the close of last week’s summit in Mexico that his country had decided to reduce its initial offer of 220,000 barrels of crude a day to 80,000 barrels.

The original plan, which had its start at a multilateral meeting held in 2005 in the Mexican ocean resort of Cancun, involved a deal with Mexico’s state-run Pemex petroleum company to supply 220,000 of the 360,000 barrels that will be processed each day at the future refinery, with the remainder being provided by the winner of a bidding process.

President Calderón explained that the reduction in the supply volume “is due to an objective estimate of Mexico’s petroleum production.” He also admitted to a recent “decline” in some Mexican oil reserves.

“What we want is to give the project viability with the Central American countries and Colombia, to present realistic alternatives and of course take care of our own petroleum production and consumption,” he said.

A diplomatic source said that the only one of the four foreign firms interested in the original plan that is still willing to accept the new conditions is China National Petroleum Corporation.

Guatemalan President Oscar Berger showed the most continuing enthusiasm for the project, and Honduran President Mel Zelaya thanked Mexico for being honest about oil quantities.

 

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