Mexico's Pemex risks refinery accidents with planned job cuts

Plans by Mexican state oil company Petroleos Mexicanos to cut jobs at its six refineries through attrition this year could undermine safety at the plants, an internal company document shows.

Pemex plans to leave 9,374 vacancies at its refineries unfilled this year, 50% greater than its unfilled refinery positions last year, the document by refining unit Pemex TRI shows.

Most unionized jobs at the politically sensitive company cannot be easily eliminated nor filled by workers who are not members of Mexico’s powerful oil workers union.

While the union is allowed to insist the jobs be filled with its members, Pemex ultimately decides whether they will be filled at all.

“This situation leaves the refineries vulnerable because it puts the operational continuity and maintenance of facilities at risk,” according to the document, written by one Pemex executive to a superior warning about the unfilled jobs.

There were 22,472 unionized and 1,297 non-unionized workers at Pemex’s refineries, according to a document dated November 2020, seen by Reuters.

“It could cause incidents and/or accidents impacting personnel, facilities the environment, and the delineation of corresponding responsibilities due to the lack of coverage of the blocked places in question,” the executive wrote.

If plans to cut jobs through attrition are put in place, the Salamanca refinery in the heart of the country will be hit hardest with 1,966 unfilled union jobs.

Elsewhere, the Madero refinery in the north will be left with 1,792 vacancies and the Minatitlan refinery near the Gulf of Mexico would be left with 1,738.

Pemex did not respond to a request for comment on the document nor on the number of refinery workers. The oil workers union did not respond to a request for comment.

The document does not state the reason for leaving the union jobs unfilled. Debt-laden Pemex has repeatedly said it is seeking to cut costs.

Pemex said in its 2019 annual report released last year that it has eliminated 153 office jobs as well as 222 in its subsidiaries.

A source at the company, speaking on the condition of anonymity, said there have been no layoffs at the plants but declined to comment on the non-public document and the safety allegations raised in the document.

Even though the refineries have a combined processing capacity of 1.6 million barrels per day (bpd), they process less than half of that, Pemex’s third-quarter financial report showed.

Under Mexican President Andres Manuel Lopez Obrador, Pemex has started allocating more resourcing to modernizing its ailing refineries - and building a seventh one in his home state Tabasco - to help boost domestic gasoline production.

Since taking office in 2018, Lopez Obrador has vowed to reduce Mexico’s dependence on imported fuels by around 50% in an attempt to revive Pemex, one of the world’s most indebted national oil companies. (Reporting by Adriana Barrera; Editing by Christian Plumb and David Gregorio)

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