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Feature 020413 Baker

Monday, February 4, 2013

 

Reflections on the Incident at Pemex Headquarters in Mexico

 

By George Baker

 

1.      The explosion in the basement of Building B-2 in Pemex’s headquarters complex, in Mexico City, was not an industrial accident, as the building is not a facility in which petroleum products are processed, transported or sold. The explosion could have taken place in any other building that operated as an administrative center or office building (the Latin American Tower, for example).

 

2.     Had the explosion taken place in the adjacent Building B-1, however, where the Natural Gas Pipeline Control Center is located, it could have affected the ability of Pemex Gas to monitor and control the National Gas Pipeline System (supposing the absence of a parallel, off-site facility).

 

3.     Twenty-four hours later, the cause of the accident of January 31 is unknown. Three main lines of speculation circulate:

 

·        A leak in an LGP line or tank caused heavier-than-air propane to accumulate near the floor where there was an electrical spark or an open flame.

·        A leak in a natural gas pipeline caused lighter-than-air methane to accumulate near the ceiling where there was an electrical spark or an open flame.

·        An incendiary device was planted (as occurred 30 years before when archives were destroyed in several fires in the archives of Pemex and the Oil Workers' Union).

 

4.     The prompt arrival at the scene of the incident of the president and the top tier of the federal government, plus the director general of Pemex, represents a proactive effort to avoid the public relations calamity of 1985 when senior officials from the PRI government of Miguel de la Madrid appeared to be indifferent to the plight of the hundreds or thousands of earthquake victims trapped by the collapse of buildings caused by the 8.1 earthquake of September 19th. The images on television and on the Internet of a building that had partially collapsed, with survivors trapped inside, brought back memories of the collective trauma of the 1985 earthquake.

 

5.     On the other hand, as in 1992, the incident may be used as a justification for taking other measures that have little, or no, bearing on the accident or its consequences. An example of this kind occurred when, following the explosion of Pemex gasoline in a sewer line in a poor neighborhood in Guadalajara, two months later Pemex announced a major restructuring.

 

6.     As was the case with the Pemex industrial accidents of 2012, 2010, 2007, 1996 1992 and 1979, in relation to which no executive or manager was held accountable, it is unlikely that any Pemex careerist will be inconvenienced by an investigation that might show him or her in an unfavorable light. An investigation into the “root cause” will continue until the accident is all but forgotten.

 

7.      If Pemex were Pemex, S.A. de C.V., the value of its shares, in response to this incident, would have slipped 3-5%, in anticipation of additional costs that will be necessary to repair or replace the building and its furnishings. Shares would not have fallen by 15-20% however, as the incident does not affect (as the Pemex Investor Relations Office correctly indicates, in a bilingual press release issued February 1) industrial or commercial operations.

 

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MexiData.info note: For interesting commentary and analyses on Mexican energy and oil policy, link to http://www.energia.com/.

 

George Baker is the director of Energia.com, a publishing and consulting firm based in Houston.  He can be reached via e-mail at g.baker@energia.com.  Reprinted with permission.


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