Flooding, EPC Co. Pullout Raise Doubts At Mexico’s Flagship Energy Project

Progress at Mexico’s biggest energy infrastructure project, the Dos Bocas refinery in Tabasco state, was slowed this week by heavy rains that flooded the construction site, adding to mounting criticism that the project as currently designed is a drain on state funds and part of a poorly designed energy policy.

Analysts at Eurasia Group on Monday said evidence of “unrealistic plans” for Dos Bocas are starting to emerge after Houston-based energy, procurement and construction (EPC) company KBR, Inc. pulled out of the second phase of the project. KBR and the government reportedly failed to agree over an increase in the budget for the project’s second stage, which had doubled from the Energy Ministry’s original assessment of $2.2 billion.

Dos Bocas was a central part...