Reporting by Valentine Hilaire, Ana Isabel Martinez, Adriana Barrera and David Alire Garcia, Reuters

MEXICO CITY
EnergiesNet.com 10 27 2023

Mexican state energy company Pemex said on Friday it had received billions of dollars from the government to help strengthen its financial position and pay back mounting debt as well as pay for its new refinery.

Pemex has for decades struggled with a heavy tax burden and previous support – in the form of cash injections and tax cuts – has largely gone toward keeping the world’s most indebted energy company alive.

In October, Pemex received 55.9 billion pesos ($3.2 billion) from the government to strengthen its financial position, accounts show. Separately, Pemex received 71.7 billion pesos over the quarter for debt amortizations.

“It is support never seen before,” CEO Octavio Romero said in a call with investors.

Pemex had also received $5.8 billion for the Olmeca-Dos Bocas refinery by the end of September.

The quarterly results come as lawmakers debate a lower tax bill for Pemex, after the lower house last week approved a cut to Pemex’s profit-sharing DUC – effectively a tax paid to the government and the largest contribution – to 30% from its current 40%.

President Andres Manuel Lopez Obrador, who has pledged to revive the ailing company, has championed a gradual easing of the tax from a high of 65%.

Carlos Urzua, who was finance minister between 2018 and 2019 under Lopez Obrador, told Reuters the president’s support for Pemex had been too one-sided and unsustainable.

Instead of focusing so much on Pemex, Mexico could have made more of private-sector investment, boosting renewable electricity output and reducing fossil fuel reliance, he said.

Lopez Obrador has sought to pump and refine more.

In the third quarter, Pemex produced on average 1.850 million barrels per day (bpd) of crude oil and condensate, not including production with partners, the accounts show.

The increase of 4.9%, compared to the same period last year, was down to the incorporation of key fields like Ixachi, Quesqui and Tupilco Profundo. Meanwhile, crude processing at its local refineries averaged 778,000 bpd, a decrease of 3.6%.

Pemex also reported a third-quarter net loss of 79.13 billion pesos, revenues of 462 billion pesos and a financial debt of $105.8 billion.

($1 = 17.4279 Mexican pesos at end-September)

Reporting by Valentine Hilaire, Ana Isabel Martinez, Adriana Barrera and David Alire Garcia; Writing by Stefanie Eschenbacher; Editing by Anthony Esposito, David Holmes and Jonathan Oatis

reuters.com 10 27 2023