Explosion at headquarters of Mexico’s state-owned oil company kills 32 [UPDATED]

By Philip Bump

It’s not clear why the lower floors at the headquarters of Pemex, Mexico’s state-owned oil company, exploded. Things that have been blamed so far: a gas leak, a malfunctioning boiler, the electricity supply. Mexico’s Interior Minister, Miguel Angel Osorio, outlined the known facts for the press last night (translated via Google):

[Yesterday], around 15:40 pm in the North Annex B-2 Pemex Administrative Center, there was an explosion which seriously affected the ground floor, basement and mezzanine of the building and caused severe damage to three floors. …

The death of 25 people, 17 women, eight men, same SEMEFO have been transferred to the Attorney General of the Republic, 101 wounded, of whom 46 remain in care and the rest were discharged.

What is clear is that Pemex has a track record of mistakes and accidents — and that the explosion comes at a tricky political moment for the company.

From The New York Times:

The blast — in a highly protected but decaying office complex — comes in the middle of a heated debate over the future of Pemex, a national institution and a corporate behemoth that has been plagued by declining production, theft and an abysmal safety record that includes a major pipeline explosion almost every year, like the one in September that killed 30 workers.

Experts, while cautioning that it was too early to tell what had gone wrong, said the company would inevitably face more severe scrutiny as Mexico’s Congress returned to work in the coming weeks. The country’s new president, Enrique Peña Nieto, has pledged to submit a plan for overhauling Pemex, opening it to more private investment and perhaps greater consolidation. But with the blast, deliberations about the company could become more elemental.

“You pull all of this together and you say, well, if they can’t even guarantee safety in their own building, their own headquarters, what does that tell us about the company?” said Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars.

It doesn’t tell us much new about the company. Last September, an explosion at a gas plant killed 26. In 2005, workers cut into a pipeline, killing six. In 2008, poor training resulted in an accident that killed 22 workers on an offshore platform. And those are only the first three results on a quick Google search. In a normal circumstance, blaming gross incompetence for an explosion like yesterday’s would seem naive or suspicious. Here, it does not.

George Baker of Houston’s Energia energy research institute suggested that the government would use the explosion as a pretext for change, according to the Times.

In 1992, he said, a major explosion in a residential Guadalajara neighborhood — caused by gas leaking into the sewers — was followed by calls for change, and a plan to break Pemex into smaller pieces.

“The provocation, the pretext was that we had this terrible thing happen and now we are going to have a response from Pemex,” Mr. Baker said, adding that the explosion on Thursday would also now become part of the political calculations over what to do about the company.

“This may be used, may be manipulated, used as a pretext to do something,” he said. “Who knows what that something is, but they may exploit it to do something they were going to do anyway.”

If this is the massive, deadly explosion that finally fixes a dysfunctional and dangerous company, so be it. Exploit away.

clinker

The Pemex headquarters towers over Mexico City on a smoggy day in 2004.

Update: Reports now suggest that 32 have died.

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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Explosion at headquarters of Mexico’s state-owned oil company kills 32 [UPDATED]