Mexico is increasing security at units of Petroleos Mexicanos, power plants and airports as it probes a blast at the headquarters of the state-owned oil company that killed at least 26 people and injured 101.
President Enrique Pena Nieto, who had an emergency meeting with Pemex Chief Executive Officer Emilio Lozoya Austin yesterday, plans to visit hospitalized victims today, Pemex said on its Twitter page. The government is increasing security at Pemex storage and production plants, radio Noticias MVX said on its website. The inquiry into the blast is continuing and no cause has been determined, Deputy Interior Minister Eduardo Sanchez said in a telephone interview from the nation’s capital. The Attorney General’s office is probing the explosion.
“The authorities are using all resources to investigate and understand the causes of this incident,” Interior Minister Miguel Angel Osorio Chong told reporters yesterday, standing in the plaza of the complex. The government “will remove every bit of rubble to make sure no one remains trapped.”The explosion, Pemex’s second deadliest incident since 2010, comes as Pena Nieto, who took office two months ago, has pledged to forge ahead on the biggest energy-industry overhaul since the nation seized oil fields belonging to British and U.S. companies 75 years ago. Mexico is projected to grow faster than Brazil, Latin America’s only larger economy, for a third year, according to the median economist estimates in Bloomberg surveys, after foreign investors from automakers to flat-screen TV manufacturers poured money into the country, boosting exports to a record last year.
Shattered Windows
The blast, which rocked the B2 building adjacent to the company’s main office, the second-tallest tower in the country, has killed at least 26 people, Milenio TV reported. Lozoya will speak to journalists at 8 a.m. local time, Pemex said.
Footage on Milenio TV showed shattered windows and gaping holes in walls on several floors of the building where the blast occurred. Security personnel surrounded the complex and roped off the area outside, where dozens of ambulances were parked and a bust of former President Lazaro Cardenas, who nationalized Mexico’s oil industry in 1938, stood intact.
About 3,500 employees were evacuated from the scene of the blast, some on stretchers, as smoke billowed. The Army cordoned off the Pemex complex and sent in search parties with dogs to look for survivors. The government said it rescued one person from the debris and didn’t know whether more were trapped underneath, after earlier estimating 30 were stuck inside.
Mexican Peso
The Mexican peso fell 0.1 percent to 12.7183 per U.S. dollar at 7:28 a.m. in Mexico City. Yields on the company’s bonds due 2023 rose five basis points, or 0.05 percentage point, to 3.75 percent, according to prices compiled by Bloomberg.
Leticia Vigueras, who was working on the second floor of the adjacent B1 building, said she felt a burst like a shockwave as the windows shattered.
“From the magnitude of the damage, it’s hard for me to think it was an accident,” said Vigueras, 38, a finance department employee who said one of her co-workers was killed and another is missing. “The whole structure of the first floor and mezzanine were destroyed.”
Pemex’s headquarters is located in Mexico City’s Miguel Hidalgo borough, a downtown district that includes Chapultepec Park and the National Museum of Anthropology. Most of Pemex’s production operations are managed from the south-eastern state of Tabasco. Pemex doesn’t have crude production wells or refineries in the capital.
‘Serious Damage’
The explosion “seriously” damaged the basement and the first two floors of building B2, Osorio Chong said. International experts will be called in to help in the investigation, he added.
The incident occurred between 3:40 p.m. and 3:45 p.m. local time. It may have been related to maintenance deficiencies in the boilers used for power generation and air conditioning, Mexico City-based newspaper El Universal reported, citing Moises Flores, the leader of one of Pemex’s unions.
Pemex earlier said on its Twitter account that an electrical failure had prompted a preventive evacuation of the headquarters.
“We’re going to dedicate ourselves as much as possible to first know what happened,” Pena Nieto said from the explosion site. “If there are people who are responsible in this case, we’ll put the full weight of the law on them.”
Pemex Modernization
Pena Nieto spent part of this week at an annual conference for his Institutional Revolutionary Party, promoting his proposed energy-industry overhaul in a bid to stem production declines at Pemex, the nation’s largest company by revenue and the world’s fourth-largest crude producer. While he’s promised not to privatize Pemex, he’s also pledged to forge ahead on a modernization that would allow more non-government investment and boost competitiveness.
The state-owned oil company said that its tower would be shuttered until further notice.
In a late-night statement Pemex said its oil production, fuel processing and distribution won’t be affected. The fuel supply will be guaranteed, while commercial and financial agreements will be fulfilled, according to the company.
At least three other incidents have caused significant casualties at Pemex in the past five years. A fire at a gas distribution hub near the U.S. border left at least 30 dead last year, and 21 workers were killed in 2007 when an oil rig hit a drilling platform in the Gulf of Mexico.
Criminal Gang
In addition, an explosion prompted by a criminal gang attempting to steal oil from a pipeline in the state of Puebla killed 28 in 2010. Mexico has been wracked by drug violence since then-President Felipe Calderon sent troops to fight the nation’s organized crime groups after taking office in December 2006. The drug war resulted in more than 58,000 deaths during his term, and his government estimated it shaved one percentage point annually off gross domestic product.
Milenio newspaper reported that between 2008 and 2011 Pemex requested funds to update disaster-prevention equipment, such as smoke detectors, at its headquarters. The government repeatedly denied those requests, Milenio said.
The explosion could have been even more deadly at other times of day.
“At the time of the blast many Pemex employees, including my staff and those of other board members, were out” board member Fluvio Ruiz said in an interview yesterday. “It was lunch hour.”
The Pemex facilities are “very well maintained,” leaving a “low probability” of accidents at the site, Sergio Flores, a former Pemex employee who teaches architecture at Mexico’s National Autonomous University in Mexico City, said in an interview.
Asked by Milenio TV whether explosives may have been involved in the blast, oil workers union leader Carlos Romero Deschamps said there was no such evidence.
To contact the reporters on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net; Brendan Case in Mexico City at bcase4@bloomberg.net; Carlos Manuel Rodriguez in Mexico
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