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  • 5
    Feb
    2013
    1:46am, EST

    Pemex blast caused by gas build-up, officials say

    Henry Romero / Reuters

    Family members and friends carry the coffin of Pemex employee Enrique Hernandez, who died in the Jan. 31 explosion at the at the headquarters of state-owned oil giant Pemex, at a cemetery in Mexico City, Feb. 4.

     

    By Lorena Segura, Reuters

    MEXICO CITY - The Mexican government said on Monday that a gas leak caused a blast that killed at least 37 people at the offices of state oil monopoly Pemex in Mexico City, raising fresh questions about the firm's safety record. 

    Attorney General Jesus Murillo said no trace of explosives was found at the site of the explosion, the latest in a string of disasters to hit the lumbering oil giant.

    New President Enrique Pena Nieto is seeking to overhaul Pemex as part of a raft of economic reforms aimed at boosting growth in Latin America's No. 2 economy.


    "We have been able to determine that the explosion was caused by an accumulation of gas in the basement of the building,'' Murillo told a news conference in Mexico City. He said the gas was believed to be methane.


    Follow @NBCNewsWorld

    Murillo said the gas may have leaked from containers in a storage facility connected to where the explosion took place by a tunnel. Or it could have leaked from an aging pipeline that passed through the building.

    Another possibility is that it emanated from sewage in the ground under the building, he said.

    Mexico City is built on a dried-out lake bed, and the stench of sewage often hangs over parts of the downtown.

    Murillo said contractors working on supports under the building needed electricity and used an extension cord, which could have caused a spark that ignited the gas.

    Thursday afternoon's blast at a building at the Pemex headquarters complex in downtown Mexico City prompted speculation the incident could have been an act of sabotage.

    That raised fears that drug war violence that has killed an estimated 70,000 people in the past six years could have entered a new, more sinister phase, and rattled investors.

    Reform outlook
    The explosion next to Pemex's flagship tower block prompted renewed criticism of the oil giant's safety record.

    For years a source of national pride, Pemex has proven stubbornly resistant to change. The firm has become a touchstone for Mexico's capacity for economic reform since oil output began to fall behind the performance of other major producers.

    A symbol of Mexican self-sufficiency since President Lazaro Cardenas expropriated U.S. and British oil companies in 1938 and nationalized the oil industry, Pemex has also become a byword for inefficiency and graft.

    More bodies found after Mexico skyscraper blast

    Pena Nieto, who took office in December, has made passing an energy reform to boost crude production a priority this year.

    Geoffrey Pazzanese, who co-manages Federated Investors' $523 million Federated InterContinental Fund, said an accident would help the government push its energy reform.

    "It's probably going to be positive for the reform. It underlines the need for Pemex to invest in its own capital spending,'' he said before Murillo spoke. "You have a big explosion in a building that's right in the middle of the city.

    ''Conspiracy theories aside, people are probably outraged about the situation and that tends to spur action," he added.

    There were mixed responses on the streets of the Mexican capital to the government's news conference about the blast.

    Fernando Chapa, 61, a university administrator, said the evidence seemed credible and that it looked like an accident.

    ''It doesn't suit anyone having an attack there. These are old buildings that have leaks. It's like in the mines," he said.

    But supermarket worker Jorge Lopez was not convinced.

    ''I don't believe it. What a coincidence that there was a gas buildup," said Lopez, 28. ''These are the results they give us after all these days? I don't know..."

    Output slump
    Mexico is the world's No. 7 oil producer and a top exporter to the United States. But output has slumped from a peak of 3.4 million barrels per day in 2004 to under 2.6 million bpd now.

    While the company had said it improved safety prior to the blast, fires, explosions and other safety breaches that are regular occurrences.

    Mexico loses hundreds of millions of dollars a year to theft of oil carried out by drug gangs, petty criminals and corrupt workers. The Mexican government relies on oil revenues to fund nearly a third of the federal budget.

    The heavy tax burden has limited Pemex's ability to fund new projects and lift crude output. The government has warned that Mexico could become a net oil importer as early as 2018 if major new oil finds cannot be developed.

    The company had pinned its long-term hopes of boosting production on the deep waters of the Gulf of Mexico, where the government estimates there are significant oilfields.

    The last conservative administration had helped Pemex by drawing more outside investment into mature oilfields via the auction of private contracts.

    Copyright 2013 Thomson Reuters. Click for restrictions.

    10 comments

    PEMEX is one of the most corrupt oil companies in Latin America. This explosion they had in an office building is nothing compared to the complete lack of safety in the drilling and production areas of their business. I watched two men fall to their death on a drilling/production platform in Campech …

    Show more
    Explore related topics: mexico, explosion, gas, pemex
  • 1
    Feb
    2013
    11:33pm, EST

    Mexico City seeks cause of deadly Pemex blast; attack not ruled out

    Miguel Tovar/stf / Getty Images

    The aftermath of a deadly explosion at the complex that houses Pemex, Mexico's state-run oil monopoly, in Mexico City on Thursday.

    MEXICO CITY — Mexico's government vowed on Friday to find out whether an explosion that killed 33 people at the headquarters of its state-run oil monopoly Pemex was a deliberate attack or yet another stain on the company's safety record.

    Rescue workers continued to pull bodies from the debris on Friday and officials said the search would continue until they account for everyone inside the Mexico City building.

    Government officials have refused to speculate over what caused the explosion on Thursday but said they had deployed large teams of experts to pore through the wreckage.


    The government is determined to find out the truth, whatever that may be ... whether it was an accident, negligence or an attack, whatever," Attorney General Jesus Murillo said on Friday evening. "We are not going to rule out anything."


    Follow @NBCNewsWorld

    He said the explosion did not cause a fire but refused to be drawn on what that implied about the cause. Parts of the reinforced concrete ground floor of the building caved in, and the ceiling was a mess of twisted metal pipes and ducts.

    The blast at Pemex's complex in the capital killed at least 33 people and a further 121 were injured. The scenes of chaos have dealt another blow to Pemex's image, just as Mexico's new government is seeking to open up the oil industry to more private investment.

    Speculation over the cause has ranged from a bomb attack, to a gas leak, to a boiler blowing up.

    "A fatal incident like yesterday's cannot be explained in two hours. We are working with the best teams in Mexico and from overseas. We will not speculate," Pemex's chief executive, Emilio Lozoya, said on Friday.

    National mourning
    New President Enrique Pena Nieto declared three days of national mourning.

    Pemex, which was created when Mexico nationalized its oil industry in 1938, is a symbol of self-sufficiency but it has also been blighted by corruption, inefficiency and frequent accidents costing hundreds of lives.

    The latest Pemex disaster is one of the first serious tests for Pena Nieto, who must overcome the legacy of his Institutional Revolutionary Party, or PRI, which ruled for much of the last century.

    After seven decades in power, the party gained a reputation for corruption and cover-ups that have made Mexicans skeptical of whether they are being told the truth.

    Investors have been closely following how far he will go in enticing private capital to boost flagging oil output in a country that is the world's seventh biggest producer.

    "This incident speaks very poorly of the image of Pemex management, and that's interpreted as additional risk in the market,"said Miriam Grunstein, an energy researcher at Mexico's CIDE think tank.

    A Pemex official said the damaged area of the company's headquarters was used for human resources in the corporate and refining divisions. It did not have a boiler or gas installations, the official said.

    Former Pemex worker Ricardo Marin, 53, said there was nothing in the building that would explode and that the kitchen, where there would be gas, was on the other side.

    "The only thing that occurs to me is that it was an attack — but against whom? There's no one with an important job down there," he said, waiting outside the Pemex hospital where a friend was in intensive care. "Maybe it could be a message to Pena Nieto, but not even that has any logic."

    Pemex office worker Alfonso Caballero, who was one floor above the blast at the time, said he did not smell any gas and guessed it had been caused by machinery.

    Mexican officials have not ruled out sabotage.

    An official at the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives said an "international response team" was on its way to Mexico City at the request of the Mexican government. The team includes explosive specialists and fire experts.

    Pemex CEO Lozoya said the four floors most affected by the explosion normally had about 200 to 250 people working on them.

    About 10,000 staff work in the entire complex.

    Red Cross official Isaac Oxenhaut said the ceiling had collapsed in three lower floors of the Pemex building.

    Safety in the spotlight
    The blast followed a September fire at a Pemex gas facility near the northern city of Reynosa that killed 30 people. More than 300 were killed when a Pemex natural gas plant on the outskirts of Mexico City blew up in 1984.

    Eight years later, about 200 people were killed and 1,500 injured after a series of underground gas explosions in Guadalajara, Mexico's second-biggest city. An official investigation found Pemex was partly to blame.

    Whatever caused the explosion, the deaths and destruction will put the spotlight back on safety at Pemex, which only a couple of hours beforehand had issued a statement on Twitter saying it had managed to improve its record on accidents.

    "I suspect this was a bomb," said David Shields, an independent Mexico City-based oil analyst. "There are clandestine armies across Mexico, not just the (drug) cartels."

    Shields pointed to the bombing of several Pemex pipelines in the eastern state of Veracruz in 2007. A shadowy Marxist rebel movement took credit for some of the blasts.

    Meanwhile, George Baker, director of Energia.com, a Houston-based energy research center, said past history suggested the government could seek to exploit the incident.

    He pointed to the 1992 Guadalajara blast and the subsequent deal that followed to overhaul the Pemex administration led by then-President Carlos Salinas, like Pena Nieto a PRI member.

    "Salinas said he wanted a response from Pemex, and months later Pemex announced a restructuring. The restructuring had nothing to do with the Guadalajara accident, but it was used as a pivot to do something," Baker said.

    Pena Nieto has yet to reveal details of his Pemex reform plan, which already faces opposition from the left.

    Both Pena Nieto and his finance minister were this week at pains to stress the company will not be privatized.

    Related:

    At least 33 dead in Mexico City skyscraper explosion

    19 comments

    Mexico--has cost the United States tax payers alot of money $113,000,000,000.00-The cost of illegal Mexicans in 2012---with 70% of the cost passed on to the States 1,400,000 -Illegal Mexican households getting benefits---food stamps--supplementary social security--subsudized housing--wic--medicaid …

    Show more
    Explore related topics: mexico, explosion, mexico-city, pemex
  • 1
    Feb
    2013
    11:26am, EST

    At least 33 dead in Mexico City skyscraper explosion

    The death toll has risen to 32 in Mexico City after an explosion blasted the lower floors of a skyscraper housing the headquarters of state oil monopoly Pemex. NBCNews.com's Dara Brown reports.

    By Kari Huus, Staff Writer, NBC News

    The death toll from a powerful explosion in the Mexico City skyscraper complex housing the offices of state oil monopoly Pemex rose to at least 33, company and government officials said Friday.

    Twenty men and 12 women were killed, the company said — while 121 were injured, 52 of whom remain in hospital. 

    Mexican President Enrique Peña Nieto arrived at the Pemex administration complex by helicopter Thursday night to supervise rescue operations, Pemex and the news agency La Prensa reported. Hundreds of Mexican military forces were sent to the complex to "preserve security," officials told newspaper El Universal.


    Rescue crews had searched most of the area damaged by the blast by Friday afternoon, said Attorney General Jesus Murillo said. But he added that survivors or more victims could still be found in the most unstable parts, which had not yet been fully checked.

    Emilio Lozoya Austin, director general of Pemex, which is short for Petrõleos Mexicanos, told Reuters Friday the the company was "working with the best teams in Mexico and from overseas" to find the cause of the explosion.

    He was flying home from a business trip to Asia when the blast occured. He said he extended his condolences "to all the families of Pemex workers who have lost their loved ones."

    The explosion took place in the basement garage of the auxiliary building, next to the company's 52-floor tower in a busy commercial and residential area, said Eduardo Sánchez, a spokesman for the Interior Ministry.

    Stringer/Mexico/Reuters

    An injured woman is transferred to a stretcher outside the headquarters of state oil giant Pemex in Mexico City on Thursday.

    "They're conducting a tour of the building and the area adjacent to the blast site to verify if there are any still trapped so they can be rescued immediately," Sanchez said Thursday.

    A government official, speaking on the condition of anonymity, said preliminary findings suggested the blast was caused by aged boiler exploding in a building next to the tower, Reuters reported.

    The plaster ceiling of the basement collapsed, a spokesman for the local emergency agency said. He described conditions in the tower as "delicate."

    The main floor and the mezzanine of the auxiliary building were heavily damaged, along with windows as far as three floors up. 

    A man who was on the ground floor when the explosion occurred told Forum TV that the first casualties were taken to a clinic in the adjacent office tower, where several thousand people work.

    "It shook the building, and then we were evacuated," he said.

    Company touted safety record
    News of the blast came toward the end of the business day — just a few hours after the company had sent two messages on Twitter celebrating how much it had "reduced our accident rate in recent years," announcing that its "safety indicators" exceeded international standards:

    Twitter.com

    Twitter.com

    "An explosion took place in the B2 building of the administrative center," Pemex tweeted just after 4 p.m. local time (5 p.m. ET). "There are injuries and damage on the ground floor and mezzanine," it said, promising further information as it became available.

    Pemex initially said the building had been evacuated because of a problem with its electricity supply. It then said there had been an explosion, but it didn't give the cause.

    Milenio TV via NBC News

    The scene at Pemex headquarters in Mexico City on Thursday after an explosion. There was no official explanation for the blast.

    Television images showed people being evacuated — some on office chairs and gurneys. Emergency crews loaded people on stretchers into helicopters and airlifted them out of the area.

    "The place shook, we lost power and suddenly there was debris everywhere," Cristian Obele told Milenio news network. "Colleagues were helping us out of the building."

    Jose Cuellar, a mechanic who works near the complex, said he was repairing a car when an explosion rocked his entire workshop.

    "We went to see and saw people coming out injured," Cuella, 45,  told El Universal. "Other people were carrying them."

    Edgar Zuniga Jr. and M. Alex Johnson of NBC News, Telemundo and Reuters contributed to this report.

    227 comments

    Just the continuation of the Drug Cartel indicating that they want control of the Oil and Gas Bounty of Mexico. The President, of Mexico, has to protect the people. Mexico is vulnerable as the people are.

    Show more
    Explore related topics: mexico, world, explosion, americas, disaster, mexico-city, pemex, featured, kari-huus

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