Government to Assume PEMEX Debt in 2021By María Fernanda Barría | Mon, 03/22/2021 - 15:07
Mexico’s government will absorb PEMEX’s debt payments in 2021, a commitment that amounts to US$6.4 billion. “The president is committed to protecting and rescuing PEMEX and he is confirming it with deeds,” stated Octavio Romero, PEMEX Director General, during the celebration of the 83rd anniversary of the oil expropriation.
According to several analysts, the company is going through an unprecedented financial crisis, with a debt that in 2020 increased by 38 percent compared to 2019. In February, the government injected US$1.5 billion to pay debt amortizations, while implementing actions aimed at reducing the NOC’s fiscal pressure. President López Obrador defended his financial rescue strategy for the benefit of the state-owned oil company during a press conference. “Before, the Treasury took everything from PEMEX. Now, there is a process to limit that tax burden, something that will help the company,” he said. “Taxes will be reduced to strengthen PEMEX and CFE. We will boost companies so that they do not lack resources for the exploration and production of oil fields,” López Obrador added.
PEMEX grew by 13.9 percent in one year according to Forbes, something that has failed to contain the enormous growth of its debt. According to the publication, PEMEX increased its balance in credit lines in dollars, while the peso weakened against this currency.
Romero was optimistic about the future when he added that PEMEX had made a new discovery of between 500 to 600MMboe and that the company expects to close 2021 with a production of close to 2MMb/d. “With this moderate production, we will fulfill the commitment to replenish 100 percent of proven reserves. In this way, we will avoid the excessive use of fossil fuels and we will not affect what future generations will inherit,” said López Obrador.
PEMEX currently pumps around 1.7MMb/d while industry analysts have been less than optimistic about the possibility of a significant increase.