Sweeping energy reforms have turned Mexico into one of the world’s most attractive offshore prospects, but one segment is getting no love from U.S. investors: the nation’s aging refineries.
Efforts by Mexico’s state-owned oil company Pemex to attract about $5 billion in capital to help modernize its two largest refineries so far have proved futile, according to two people familiar with the process who declined to be named because they were not authorized to speak publicly.
The company is seeking a joint venture partner for its Salina Cruz refinery on the West Coast. It’s also looking for an investor to complete construction of a coking unit to process heavy crude at its Tula refinery just north of Mexico’s capital.
Among those to rebuff overtures from Pemex over the past year are U.S. refining giants Valero Energy Corp (VLO.N) and Tesoro Corp (TSO.N), the people said.
Valero and Tesoro declined to comment. Those and other companies were deterred by operational, political and market concerns, the people said.