UPDATE 4-Mexico blast kills at least 33, flagging Pemex safety woes

Gabriel Stargardter and David Alire Garcia
Reuters Middle East

* More than 100 injured, others still trapped

* President courting private investment for state monopoly

* Pemex a byword in Mexico for accidents and oil theft

(Adds comments, details on U.S. specialists going to Mexico)

MEXICO CITY, Feb 1 (Reuters) - Rescue workers pulled out

more bodies from debris at the headquarters of Mexican state oil

giant Pemex on Friday after a powerful explosion killed at least

33 people and threw a spotlight onto the state-run company's

poor safety record.

Scenes of confusion and chaos outside the downtown tower

block in Mexico City have dealt another blow to Pemex's image,

just as Mexico's new president is seeking to court outside

investment for the 75-year-old monopoly.

Thursday's blast occurred at a Pemex building next to the

50-story skyscraper, and senior officials said 33 people had so

far been confirmed dead. A further 121 were injured, said the

company's chief executive, Emilio Lozoya.

Officials have been unable to say how many people may still

be trapped in the wreckage of the office block, which remains

cordoned off. A military paramedic at the scene said there were

likely many and expected the death toll to keep rising.

Lozoya said it was not clear what caused the midafternoon

explosion, which has been the subject of speculation ranging

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," he told a news conference.

Pemex, both a symbol of Mexican self-sufficiency and a

byword for security glitches, oil theft and frequent accidents,

has been hamstrung by inefficiency, union corruption and a

series of safety failures costing hundreds of lives.

The latest Pemex disaster is also one of the first serious

tests for President Enrique Pena Nieto, who took office in

December saying overhauling the company was a top priority.

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 number seven 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 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 which 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 worst affected by the

explosion normally had about 200 to 250 people working on them.

That compared with about 10,000 staff in the entire complex.

Red Cross official Isaac Oxenhaut said the ceiling had

collapsed in three lower floors of the Pemex building.

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 member of the

Institutional Revolutionary Party, or PRI.

"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.

(Additional reporting by Adriana Barrera, Simon Gardner and

Krista Hughes; Writing by Dave Graham; Editing by Louise

Ireland, Vicki Allen and Eric Beech)

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