Explosion at Pemex headquarters kills at least 35

By ANTHONY HARRUP

MEXICO CITY -- Mexico's state oil monopoly Petroleos Mexicanos said the number of people killed in an explosion at its corporate headquarters in Mexico City rose to 35 on Sunday after rescue workers pulled two more bodies from the rubble of the damaged office block.

One body was found overnight Saturday and another Sunday, Pemex said in updates on the rescue effort via its Twitter account.

 "I want to emphasize the complexity of the investigation. We can't explain something like this in a few hours," said Pemex CEO Emilio Lozoya.

Mexican officials privately said there was no early indication of sabotage in the blast, which sent a giant fireball into the sky and partially destroyed an administrative building next to the oil firm's landmark skyscraper, which has 48 floors and towers over the city's central skyline.

Mexicans were shocked by the blast given that it took place at the headquarters of the country's biggest company, a symbol of Mexican nationalism. It also comes just months before President Enrique Pena Nieto is expected to propose changes that could end the company's monopoly on oil exploration, allowing private firms to partner with the state firm for the first time.

Analysts discounted the likelihood that the blast was an attack.

"Instead, the explosion is a reflection of Pemex's aging infrastructure and lacking safety protocols," Alejandro Schtulmann, an analyst with political consultancy Empra, wrote in a note to clients.

Pemex's headquarters lies in a dense neighborhood surrounded by hundreds of illegal street businesses, some of them owned by Pemex personnel, Mr. Schtulmann said. "Like most informal businesses in Mexico, many of these street shops rely on illegal connections to the local power grids as well as water and gas lines," he said.

Twenty of those killed were women who worked in the building in administrative jobs like payroll, Pemex officials said. Some 52 other people remained hospitalized Friday due to the explosion, which the company said hadn't affected its oil operations.

It was unclear how many people might still be trapped in a basement part of the building, which was partially collapsed. Hours after the blast, officials said there might be about 30 people left in the rubble, but then said that number couldn't be confirmed. The four floors most affected by the explosion normally had about 200 to 250 people working on them.

If investigations confirm an industrial accident, it will be an embarrassing blow to the firm. Just two hours before the blast at Pemex headquarters, the company touted its security record at a conference titled "First Congress for Security, Health and Environmental Protection" in the city of Merida in eastern Mexico.

"Operations Director Carlos Murrieta pointed out that we have reduced the occurrence of accidents in recent years," Pemex said on its Twitter page, adding that its accident rate was below international standards for similar companies.

Pemex has fairly rosy numbers in terms of onsite industrial accidents, but most of the people who have died over a number of decades in Pemex accidents have been contract workers or others killed by fuel leaks and gas explosions, and those victims are not counted as workers for the purposes of reporting industrial accident rates, said George Baker, who runs a Houston-based energy consulting firm.

In September of last year, a massive explosion at a Pemex natural-gas plant near the northern border city of Reynosa killed 30 workers and caused critical shortages of the fuel, causing the state-run electricity company Comision Federal de Electricidad to switch to more expensive fuels in order to free up some natural gas for industry.

Just before Christmas in 2010, a crude-oil pipeline ruptured near the central Mexican town of San Martin Texmelucan, killing 30 people and damaging dozens of homes.

"This latest blast shows the results of a systematic lack of oversight in contracts at Pemex that the company relies on for everything, including industrial security," said Alberto Islas, a security expert in Mexico City.

Mexico's lower house of Congress said this week it would put together a working group of lawmakers to investigate corruption within Pemex and the company's safety record.

Mexico's oil output has fallen to about 2.6 million barrels a day from a peak of 3.4 million in 2004, and experts say Mexico could cease to be a major oil exporter within the next six years.

Pemex was created in 1938 after Mexico nationalized its oil industry, a key moment in Mexican nationalism.

"This tells you that Pemex needs to change," said Mr. Islas.

Dow Jones Newswires

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