PEMEX Asked to Stand on Its Own Two FeetBy Conal Quinn | Wed, 04/27/2022 - 15:36
This week's biggest stories in oil and gas include a report revealing PEMEX have been told to resume debt repayments with its own resources, while a wave of strikes protesting deteriorating working conditions hit PEMEX facilities across the country and revelations from the Emilio Lozoya trial threaten to expose more corruption at the heart of state institutions.
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JP Morgan claims in a recent study that sanctions on Russia, which could include a blanket ban on Russian oil imports, might raise the price of the oil barrel over US$185. This is a departure from a previous JP Morgan study released at the end of March, which claimed that the war in Ukraine would result in an overall decrease in oil prices due to its impact on demand. Arguably, this prediction is currently being followed by the markets, with Brent crude prices decreasing by 5 percent to reach US$107/b this week.
Mexico's debt-laden state oil company PEMEX is facing pressure to resume financial debt repayments despite promises from President Andres Manuel López Obrador that his government would take care of them until at least 2024. On the back of soaring crude oil prices, the Ministry of Finance has called on the NOC to rely on its own resources from this month onward, having pulled capital contributions for April.
Almost two years after the conclusion of contract 42040916, the marine construction firm Diavaz has been awarded contract 648810816, worth more than MX$9 billion (US$265 million). The ruling on the international public auction for the 823-2022-CATG-93683-2-Marine Pipelines, which was originally scheduled for May 9, 2022, was brought forward to last week, leaving Diavaz as the sole bidder.
Two weeks ago, before Emilio Lozoya’s high-profile court appearance, the Attorney General’s Office (FGR) appeared willing to let the former PEMEX CEO walk free if he could successfully reach a restitution agreement with PEMEX and the Financial Intelligence Unit (UIF) to repair the damage caused by the Odebrecht and Agronitrogenados affairs. Now, it appears that Lozoya needs to provide more information, which threatens to expose a wider network of corruption.
A wave of walk-outs and sit-ins has put PEMEX facilities across the country out of operation as trade unions lead protests against deteriorating working conditions. Members of the Union of Mexican Petroleum Workers (STPRM) in Veracruz, Tamaulipas, Guanajuato, Nuevo Leon and Oaxaca protested Monday to demand the end of temporary contracts, the improvement of on-site hospital facilities and the delivery of uniforms, PPE and other necessary work materials.