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00:00:01
>> Sweeping energy reforms have turned Mexico into one of the world's most attractive offshore prospects. But one segment that's getting no love from US investors, the nation's aging refineries. Recent efforts by Mexico's state owned oil company Petroleos Mexicanos, better known as Pemex, to attract about $5 billion in capital to help modernize its two largest refineries have proved futile.
00:00:29
Reuters correspondent David Alita Garcia is at one of those refineries in Tula, just a few hours away from Mexico City, where the company is building a new plant.>> This coking plant will feature six massive coking drums. You can see one of them right here behind me. These drums will be used to squeeze as much higher value fuels like gasoline and diesel, out of heavy fuel oil, as part of the refining process.
00:00:56
Meanwhile, the company is looking for partners who might operate or even take some kind of equity or ownership stake in the refinery.>> But Pemex hasn't had any luck with that. Sources say over the past year, foreign investors, including US refining giants Valero Energy and Tesoro, have both refused to help Mexico for a number of reasons.
00:01:18
Some potential partners are wary of the huge sums of money needed to bring the aging facilities up to standard. Others complain about the large refinery workforce, whose jobs are protected by a strong union. On average, Pemex uses about 3,000 full time workers to operate each refinery. That's triple the number found at US facilities with similar sized operations.
00:01:43
Investors are also concerned about Mexico's volatile political climate. President Enrique Peña Nieto, who led the oil reform, has just a year left in office. His decision to open the country's oil industry to outside producers was vehemently opposed by many Mexicans and left-leaning politicians, including Andres Manuel Lopez Obrador, the current frontrunner for the 2018 presidential race.