Mexico’s Pemex swings into first-quarter loss

5/1/2019 – Financial Times

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© Bloomberg

By Jude Webber

Mexico’s cash-strapped state oil company Pemex swung into a 36bn peso ($1.9bn) loss in the first quarter but said things were moving steadily in the right direction and highlighted a sharp drop in fuel theft — a major cash drain.

The first-quarter loss compares to the 113bn peso profit recorded in the year ago period. However it was much smaller than the 157.3bn peso loss posted in the fourth quarter, reflecting the positive impact of a 121bn peso foreign exchange profit and the company’s new strategies, officials said.

Furthermore, they said the 15-year freefall in crude production was being controlled. Mexico’s total crude production in the quarter averaged 1.69m barrels per day, of which Pemex produced 1.661m and commercial partners produced 29,000, Alberto Velázquez, chief financial officer said in a conference call with analysts. The production goal for 2019 is 1.725m bpd.

“We have made improvements, although gradual ones. We have advanced in all areas. The challenges will require time to resolve but the trend is clear . . . Pemex is moving in the right direction,” Mr Velázquez said. The company expects to finish its long-awaited business plan by the end of June and to start bringing 20 new fields onstream by year-end.

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Mexico to announce project manager for new refinery next week

5/1/2019 – Reuters

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REUTERS/Edgard Garrido

MEXICO CITY (Reuters) – Mexico will next week announce which company or consortium will project manage the construction of President Andres Manuel Lopez Obrador’s planned refinery in his home state of Tabasco, the government said on Tuesday.

Lopez Obrador wants to build what would be Mexico’s seventh refinery to reduce Mexican reliance on U.S. gasoline imports, though the project is viewed by many energy experts as uneconomical and potentially risky due to its cost.

Energy Minister Rocio Nahle told reporters in Mexico City that state oil company Petroleos Mexicanos (Pemex)would begin receiving the proposals on Tuesday for analysis. Pemex will announce the winning proposal next week, she said.

Those companies competing for the job include two consortia, U.S.-based Bechtel with Italy’s Techint, and Australia’s WorleyParsons with U.S.-based Jacobs Engineering Group, as well as U.S.-based KBR and France’s Technip bidding individually.

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Mexico gasoline theft cut by 95%, Pemex says

4/24/2019 – Bloomberg

CaptureBy Eric Martin

President Andres Manuel Lopez Obrador’s fight against gasoline theft has reduced robbery by 95 percent as Mexico shifted fuel transport to trains and trucks, and improved security for pipelines, according to state-owned oil producer Petroleos Mexicanos.

Theft this month has declined to a daily average of 4,000 barrels from 81,000 in November, just before Lopez Obrador took office, representing roughly 11 billion pesos ($581 million) worth of fuel not lost to theft, the company said Tuesday. After distribution snags left gas stations across the country facing fuel shortages at the start of the year, supply has been fully restored, according to a presentation from the company.

Pemex is slowly shifting back to supplying gasoline by pipeline in the wake of increased government security, which Lopez Obrador said involved the deployment of 10,000 soldiers, marines and federal police. He predicted the new national guard will bolster that effort.

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Mexico’s president proposes three names for Pemex board

4/8/2019 – Reuters

08-04-2019-FOTO-02-CONFERENCIA-DE-PRENSA-MATUTINA-770x479.jpgMEXICO CITY, April 8 (Reuters) – Mexican President Andres Manuel Lopez Obrador said on Monday that he will send to the Senate his proposal for three people to fill seats on the board of state-run oil firm Petroleos Mexicanos (Pemex).

Lopez Obrador said he will propose as independent board members Edmundo Sanchez Aguilar, Juan Jose Paullada and Jose Eduardo Beltran Hernandez.

According to the Pemex website, there are three vacancies on the five-member independent board.

The Wall Street Journal reported on March 29 that three independent board members of Pemex were set to resign over conflicts with Lopez Obrador’s strategy for managing the troubled oil company.

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Mexico Keeps Key Interest Rate Steady

3/29/2019 – Bloomberg

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Susana Gonzalez/Bloomberg

By Nacha Cattan

Mexico kept borrowing costs unchanged as mounting debt at the state oil company threatens to undermine confidence in the government’s finances even as the consensus sees inflation moderating.

The central bank, led by Governor Alejandro Diaz de Leon, kept the benchmark rate at a decade-high 8.25 percent, in line with all 26 economists in a Bloomberg survey. Analysts had also unanimously forecast a hold last month. More recently, the U.S. Federal Reserve this week slashed its projected interest-rate increases for this year to zero from two.

Slowing inflation, a stronger currency, a dovish Fed and forecasts for weaker growth now have economists and investors pricing in Mexico’s first rate cut since 2014 for as soon as mid-year. However, in the statement accompanying its decision, the central bank said inflation risks persist while market uncertainty has been prevalent, pointing to a more hawkish stance than some in the market expected.

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Pemex imports crude in February, despite president’s aversion

3/27/2019 – Reuters

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REUTERS/Daniel Becerril

MEXICO CITY (Reuters) – Mexican state oil company Pemex imported crude oil in February despite the new president’s sharp criticism of the previous government’s authorization of foreign oil shipments, official data showed on Tuesday.

President Andres Manuel Lopez Obrador, who took office in December, promises to make Mexico energy independent over the next three years and has often blasted foreign imports as an insult for a country that produces its own oil.

Pemex, however, has not stopped importing relatively small amounts of crude since it launched a tender late last year in a bid to boost the company’s refining margins.

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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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