Mexico To Absorb Pemex Amortization

(Reuters, 18.Mar.2021) — Mexico’s government will absorb the debt amortization payments as of this year of state oil firm Pemex, the world’s most indebted national oil company, CEO Octavio Romero said on Thursday.

Those payments will represent over $6 billion in 2021, Romero said at an event in the southern oil-rich state of Tabasco.

Mexico’s fiscal deficit will widen to 4.1% of GDP this year, with ongoing support for ailing Pemex driving up debt, ratings agency Moody’s Investors Service said in late February. Moody’s estimated that Pemex will need $14.7 billion in government support this year alone.

“The president of the republic has offered, since [his election] campaign, to rescue Pemex, and he is demonstrating that with actions,” Romero said, standing alongside Mexican President Andres Manuel Lopez Obrador.

Pemex’s financial debt stood at $113.2 billion at the end of 2020, according to company data, despite several capital injections from the government to boost the company’s weak finances.

Romero added that Pemex has made a discovery containing between 500 million to 600 million barrels of crude oil and that the company hopes to close 2021 with production close to 2 million b/d.

Lopez Obrador said, without giving details, that the finance ministry will continue to reduce Pemex’s tax obligations and that during his administration, which runs through the end of 2024, no more than 2 million b/d of crude will be produced.

Pemex produces some 1.7 million b/d currently.