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This is far from a solution to Pemex\u2019s myriad financial woes, Alejandra Leon, Latin America upstream
director at IHS Markit said.<\/p>\n\n\n\n
@Especial
This is far from a solution to Pemex\u2019s myriad financial woes, Alejandra Leon, Latin America upstream
director at IHS Markit said.<\/p>\n\n\n\n
– Risk management chief Velarde takes interim CFO role
– Outgoing Velazquez to head new unit handling domestic sales<\/p>\n\n\n\n
By Amy Stillman and Nacha Cattan \/ Bloomberg News<\/p>\n\n\n\n
MEXICO CITY
Petroleumworld 12 02 2021
Petroleos Mexicanos is replacing its finance chief as President Andres Manuel Lopez Obrador tightens his grip on the struggling state oil giant.<\/p>\n\n\n\n
In Pemex\u2019s first C-suite shift under the current administration, the Mexican producer named risk management chief Antonio Lopez Velarde its chief financial officer, replacing Alberto Velazquez Garcia, who will run a new unit. Velarde is taking the post in an interim capacity Wednesday, the company said in a statement, without clarifying whether he\u2019ll remain at the job or eventually be replaced.<\/p>\n\n\n\n
Under Velazquez\u2019s leadership, Pemex has seen debts to suppliers and partners skyrocket, while oil production has declined for almost a decade and a half. Velazquez was also criticized for failing to instill confidence among investors. At his first New York roadshow as CFO in 2019, four investors said he didn\u2019t deliver a clear message and one of them called for his resignation.<\/p>\n\n\n\n
\u201cCommunication wasn\u2019t his strong suit, and that created a perception among investors, he failed to convince them,\u201d said Alejandra Leon, Latin America upstream director at IHS Markit. Replacing him \u201copens the possibility to change\u201d but it is far from a solution to Pemex\u2019s myriad financial woes, she said.<\/p>\n\n\n\n
Pemex didn\u2019t immediately respond to a request for comment.<\/p>\n\n\n\n
Velarde\u2019s career at Pemex has spanned two decades and includes heading the capital market and derivatives department, and steering the execution of the company\u2019s insurance underwriting. His appointment was largely spearheaded by the finance ministry, according to people familiar with the reshuffle.<\/p>\n\n\n\n
The state-owned oil company\u2019s decision-making power has been increasingly concentrated at the government level, leaving little room for maneuver by the new finance director. \u201cThe decisions being taken at Pemex are now coming from the finance ministry and the presidency,\u201d Leon said.<\/p>\n\n\n\n
Lopez Obrador, widely known as AMLO, has made Pemex the focus of his strategy to revive the Mexican economy by making it self-sufficient in gasoline, and he\u2019s rolled back the liberalizing energy reforms of his predecessor to give Pemex a bigger role in the domestic market.<\/p>\n\n\n\n
The strategy, which involves allocating more resources to Pemex\u2019s unprofitable refining business and reducing crude exports to feed the plants instead, has come under criticism from international ratings agencies such as Fitch Ratings and Moody\u2019s Corp., which rate Pemex bonds as junk.<\/p>\n\n\n\n
The company\u2019s financial debt has soared to $113 billion, the most of any oil major, and it\u2019s under pressure to reverse output declines after high spending that hasn\u2019t done much to boost reserves.<\/p>\n\n\n\n
Velazquez, who had been finance chief since President AMLO took power in late 2018, will head the newly created unit in charge of selling oil, gas and petrochemical products to the domestic market. He\u2019ll report directly to Chief Executive Officer Octavio Romero, who has also been at his post since late 2018, and won\u2019t require additional funding resources.<\/p>\n\n\n\n
Lopez Obrador and Finance Minister Rogelio Ramirez de la O have pledged to keep aiding the oil giant, whose bonds have been likened to sovereign debt.<\/p>\n\n\n\n
The latest management shuffle follows the resignation of Miguel Angel Lozada, the previous director of exploration and production at Pemex, in February, and the departure of Vanessa Ramirez, the former CFO of Pemex\u2019s trading arm PMI, in April. _____________
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Amy Stillman and Nacha Cattan from Bloomberg News<\/p>\n\n\n\n