06/12  Closing Prices / revised 06/13/2024 07:25 GMT 06/12 OPEC Basket  $83.10   +$0.74 cents  06/12 Mexico Basket (MME) $73.29  +$0.66  cents  | 04/30 Venezuela Basket (Merey)   $74.91   +$3.93 cents | 06/12 NYMEX WTI Texas Intermediate July CLN24 $78.50  +$0.50 cents  | 06/12 ICE Brent August  BRNQ24    $82.60  +$0.68 cents  | 06/12 NYMEX Gasoline June RBN24 $2.39  -0.6%  |  06/12 NYMEX  Heating Oil July  RBN 24    $2.44  +0.8% | 06/12 Natural Gas July NGN24  $3.04   -2.7%  | 06/07 Active U.S. Rig Count (Oil & Gas)   594  -6  | 06/13 USD/MXN Mexican Peso   18.7374  (data live)  | 06/13 EUR/USD     1.0809 (data live)  | 06/13 US/Bs. (Bolivar)   $36.44970000 ( data BCV)

Fallout from Mexican president’s Pemex ‘rescue’ set to greet successor – Reuters

Mexico's President Andres Manuel Lopez Obrador accompanied by Octavio Romero, CEO of Pemex gestures during the inauguration of the Dos Bocas refinery from the Mexican state-run oil producer Petroleos Mexicanos (PEMEX) in Paraiso, Tabasco state, Mexico, July 1, 2022.(Edgard Garrido/Reuters)
Mexico’s President Andres Manuel Lopez Obrador accompanied by Octavio Romero, CEO of Pemex gestures during the inauguration of the Dos Bocas refinery from the Mexican state-run oil producer Petroleos Mexicanos (PEMEX) in Paraiso, Tabasco state, Mexico, July 1, 2022.(Edgard Garrido/Reuters)

Ana Isabel Martinez, Reuters

EnergiesNet.com 02 26 2024

Mexico’s outgoing president has taken steps to promote a smooth hand-off for national oil company Pemex, three sources told Reuters, but the latest moves will likely postpone a day of reckoning for the world’s most heavily-indebted oil company.

Last week, President Andres Manuel Lopez Obrador rolled out fresh support for Pemex, part of his longstanding goal to make Mexico self-sufficient in the production of motor fuels, unveiling a new tax break worth about $6.4 billion.

The boost follows a whopping $90 billion in government support doled out to Pemex since Lopez Obrador took office in late 2018, spanning tax cuts and capital injections, most of it to service a crushing debt load of some $106 billion.

The company’s distressed finances may fall to former Mexico City Mayor Claudia Sheinbaum, Lopez Obrador’s anointed successor and current front-runner in polls ahead of June’s election.

Mexico’s next president takes office in October.

A Sheinbaum presidency would look to cut Pemex’s dependence on government funds, one source close to her team told Reuters, using tax cuts to free up company spending elsewhere.

Sheinbaum has also committed to pursing Lopez Obrador’s oft-repeated but vague goal of “energy sovereignty.”

A source close to Pemex, meanwhile, said the latest round of support will be used to cover $17.2 billion in debts to service providers, such as Halliburton (HAL.N) and Baker Hughes (BKR.O).

“All this is part of a strategy of orderly transition aimed at a soft landing for the next administration,” said a high-ranking Pemex source, who spoke on condition of anonymity.

Priorities that already enjoy Lopez Obrador’s “seal of approval,” however, could constrain his successor, the source added.

The popular president declared victory on his Pemex policy earlier this week.

“I believe that we’ve already rescued Pemex,” said Lopez Obrador, touting a reduction in its financial debt compared to six years ago.

Those liabilities fell nearly 7%, from 1.99 trillion pesos in 2018 to 1.86 trillion, as of last September.


According to calculations from the Mexican Institute for Competitiveness (IMCO) based on Pemex data, the company has to make $53 billion in regular debt payments between October and September 2027. Debt payments this year alone reach almost $11 billion.

Pemex also faces debt maturities of some $35 billion, mostly tied to its bonds, between 2025 and 2030.

“Despite everything given to it, 2024 and 2025 debt pressures are very strong,” said IMCO economist Jesus Carrillo.

“Pemex has been (Lopez Obrador’s) fiscal failure… a rescue that never came,” he added.

Neither Pemex, the president’s office nor the finance ministry responded to requests for comment for this story.

Some sources acknowledged that measures of success have been scaled back but said that some progress has been made.

“The idea is to leave Pemex better than we found it,” said one company source, admitting that “many problems have not been solved.”

The source close to Sheinbaum’s team pointed to the gradual slashing of the company’s profit-sharing DUC tax, one of the most important for state coffers, from a 65% to 30%.

The source added that the tax cuts seek to ensure that Pemex can keep more of its own revenue, and stop being a “burden” on state finances.

Still, the oil company’s crude output – overwhelmingly its main source of income – has continued to slide during Lopez Obrador’s term, from 1.8 million barrels per day (bpd) to 1.6 million bpd, despite his pledge to grow it.

And while that decline has been partially offset by booming condensate output, the president’s top priority of refining more oil at home has fallen short of his initial goal.

Domestic refining is up to about 791,000 bpd, but still far from his goal of processing at least 1 million bpd.

“There is awareness within Pemex that the goals won’t be met this year,” said one company source.

“But in an election year, promises abound.”

Reporting by Ana Isabel Martinez; Additional reporting by Adriana Barrera; Writing by Brendan O’Boyle; Editing by David Alire Garcia and Marguerita Choy.

reuters.com 02 23 2024

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com

CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

Scroll to Top