(Pietro D. Pitts, Energy Analytics Institute, 27.Nov.2024) — The credit metrics for state-owned Petróleos Mexicanos or Pemex (B3 negative) continue to weaken, according to Moody’s Rating. This, as free cash flow (FCF) negative Pemex eyes its loss-making refining business to increase production of fuel at the expense of limiting investment in the upstream or exploration and production (E&P) sector.
As an assumption, Moody’s expects the Mexican government led by president Claudia Sheinbaum Pardo will continue to support Pemex with the payment of debt maturities, the rating agency wrote 27 Nov. 2024 in a research report.
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Additionally, Moody’s expects Pemex’ operating strategy will remain virtually unchanged, at least through 2025.
However, Pemex’ main credit risks are shifting towards the financial space and away from oil production. In particular, the state oil giant, the most indebted in the oil and gas space, is pondering how to manage and address rising debt obligations in 2026-2027, the rating agency said.
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By Pietro D. Pitts reporting from Houston. © Energy Analytics Institute (EAI). All Rights Reserved.
