(Energy Analytics Institute, Ian Silverman, 25.Sep.2018) — Contrary to what is thought, investing in Pemex and increasing its production could weaken the oil company, since it hasn’t achieved the profitability necessary to operate with good finances.
The solution is no as easy as just opening the wellhead and allowing production to flow, as Mexicans sometimes think is the case, reported the daily newspaper El Financiero, citing the Pulso Information Director Pabló Zárate. “On the one hand we need more investment, but we also have to see that investments are done with profitability in mind so that Pemex is strengthened and not be weakened,” he said.
The executive added that giving more resources to Pemex doesn’t mean that its level of debt and finances will improve.
“You could end up pushing Pemex into a scheme where it produces more, its activities expand, its income is higher, but its earnings don’t necessarily increase at the same rate,” he said. “[Instead] what you would have would be something bigger but not necessarily stronger,” he concluded.
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