Mexico Could Pay Pemex Debt From $15 Billion Stabilization Fund

3/22/2019 – The New York Times

oil-monahans-texas-sunset-70362.jpegACAPULCO, Mexico — Mexico’s deputy finance minister said on Thursday the government was considering using part of a $15.4 billion public income stabilization fund to pay some debt obligations for heavily leveraged state oil company Pemex.

The finance ministry is working on a new design for the fund to make it counter cyclical, deputy minister Arturo Herrera said in an interview with TV network ADN40, during a banking conference in Acapulco.

Grappling with Pemex’s financial health has been a key challenge for President Andres Manuel Lopez Obrador, who took office in December. The entity holds roughly $106 billion in financial debt, the highest amount of any state oil firm in Latin America.

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AMLO Risks His Own Fall as He Tries to Pull Pemex Back From the Brink

3/21/2019 – Bloomberg Politics

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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.

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Mexico to delay construction of Dos Bocas refinery -deputy finance minister

3/12/2019 – Reuters

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SENER

MEXICO CITY, March 12 (Reuters) – Mexico will delay the construction of the Dos Bocas refinery and instead funnel the $2.5 billion earmarked in 2019 for the project into state oil firm Pemex, Arturo Herrera, Mexico’s deputy finance minister, told the financial Times in an interview. (Reporting by Anthony Esposito Editing by Chizu Nomiyama)

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Pemex partners to invest $250 million in two onshore blocks in Mexico

3/6/2019 – Reuters

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Reuters 

MEXICO CITY (Reuters) – Two private partners of Mexico’s state-run oil company Pemex will invest a combined $250 million in two projects over the next four years as they aim to quickly ramp up crude output, according to plans approved on Tuesday.

The joint venture partnerships with Pemex were initiatives championed by Mexico’s previous government following a sweeping 2013 energy reform, but have come under sharp criticism from current President Andres Manuel Lopez Obrador, who favors a more state-centric oil policy.

DEA Deutsche Erdoel holds the partnership rights with Pemex on its Ogarrio block and the development plan approved Tuesday by Mexico’s independent oil regulator calls for fresh investment of $161 million through 2023.

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Pemex tie-ups to proceed despite Lopez Obrador’s criticism

3/1/2019 – Reuters

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MEXICO CITY (Reuters) – Auctions later this year to pick joint venture partners for Mexican state oil company Pemex will proceed, an official at the national oil regulator said on Thursday, despite President Andres Manuel Lopez Obrador’s resistance to the tie-ups.

An official with the National Hydrocarbons Commission (CNH), the regulator that runs the auctions, said the joint venture auctions have not been canceled.

“They’re still going forward,” said Martin Alvarez, head of the regulator’s exploration contracts unit, on the sidelines of an energy forum in Mexico City.

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How Pemex Became the Most Indebted Oil Company in the World

2/28/2019 – Bloomberg

DGCS5By Amy Stillman

After more than a decade of declining production, wasteful spending and a higher tax burden than any other driller in Latin America, it’s little wonder Mexico’s Petroleos Mexicanos is the world’s most indebted oil company.

Pemex’s oil output has plunged by almost half since a 2004 peak, and its proven reserves are just a quarter of what they were almost two decades ago. Yet rather than prioritizing oilfield maintenance and new discoveries, the government-owned energy company has spent money on non-core business units and inefficient drilling projects.

Its six refineries operate at about one-third of their capacity and lose more money with each extra barrel of crude they process, despite upgrade projects that began in the early 2000s. The $12 billion Tula Bicentenario refinery was scrapped five years after it was announced, and now the new government wants to spend $8 billion on another one in Dos Bocas.

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Mexico oil regulator commissioner to step down: letter

2/27/2019 – Reuters

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Secretaría de Energía

MEXICO CITY (Reuters) – A commissioner at Mexico’s independent oil regulator will step down only halfway through his term for “personal reasons,” the commissioner said in a resignation letter that was seen by Reuters on Tuesday, a move that could give President Andres Manuel Lopez Obrador more sway over the agency’s decisions.

Commissioner Gaspar Franco, who sits on the seven-member governing body of the National Hydrocarbons Commission (CNH), will step down effective Feb. 28, according to his resignation letter, which was sent to the Senate’s president and dated Monday. The end date is three years ahead of when Franco’s six-year term was scheduled to end in 2022.

The CNH did not immediately respond to a request for comment.

Franco’s departure will give Lopez Obrador a third commissioner to replace on the regulator’s board, which approves and supervises exploration and production plans submitted by national oil company Pemex as well as private and foreign firms that have won contracts at auctions since 2015.

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