Pemex Explosion Caused By Gas Leak, According To Authorities

Pemex Explosion Caused By Gas Leak, According To Authorities

The Pemex explosion that resulted to the death of 37 people may have been caused by a gas leak, the Mexican government indicated.

The explosion site did not show any signs of explosives, according to Attorney General Jesus Murillo. President Enrique Pena Nieto is looking to overhaul the state oil monopoly to increase growth and attain economic reform in the country.

Murillo indicated that gas accumulated at the basement of a building caused the Pemex explosion. The gas may have come from an old pipeline in the building or from a storage facility that was connected with the site of the explosion. Sewage is another possible source of the gas that caused the explosion.

A dry river bed lies under Mexico City, where the smell of sewage is often noted in some parts of the city. The light used by contractors working on the foundation of the building may have resulted to the Pemex explosion.

The recent Pemex explosion resulted to more criticisms on the safety record of the company, which has resisted chances through the years. Pemex is the symbol of the self-sufficiency of Mexico although it has become more associated with graft and inefficiency.

The recent accident may allow the government to push for more reforms in the energy sector. It may also motivate the company to increase its capital spending.

The capability of Pemex in funding new project to increase its output has been limited by a huge tax burden. The government has cautioned that if no new finds are developed, the country may become an importer of oil by 2018.

The long-term plan of the government in increasing its oil production is to take advantage of the oil reserves that are believed to be found in the Gulf of Mexico.

Mexico is the seventh biggest producer of oil in the world and is the top exporter to the US. However, output has gone down to around 2.6 million barrels per day from its highest level in 2004 of 3.4 million barrels per day.

Accidents have become common for the company although it indicated that its safety procedures have been enhanced before the recent Pemex explosion.

Posted by James Fried on Tuesday February 05 2013, 9:22 AM EST. Ref: Reuters. Link. All trademarks acknowledged. Filed under Featured News, World. Comments and Trackbacks closed. Follow responses: RSS 2.0