3/21/2019 – Bloomberg Politics
By Eric Martin and Justin Villamil
Pemex is personal for Andres Manuel Lopez Obrador, who grew up in Mexico’s oil heartland at a time when the state company was a source of national pride.
Now that he’s president, the leftist leader has made it a priority to pull Pemex out of a two-decade slump. Investors are worried that the opposite could happen, with the company dragging Lopez Obrador down instead, and the economy with him.
Petroleos Mexicanos, the company’s full name, is already the world’s most indebted oil major, owing about $108 billion. AMLO needs to cut that debt, while boosting investment and output. His solution? Slashing taxes on the company that has been a cash cow for the state for decades. The market concern is that he will fail to restore Pemex to profitability (it’s been in the red since 2012), while opening a black hole in the government budget.