PEMEX Faces Outstanding Payments, Further Investment

PEMEX's outstanding payments exceed its debt payment budget for the year 350%, while the figure for power company CFE is 220% higher. This means that both companies will need to explore new funding sources.

At the end of 1Q23, PEMEX had already utilized 37% of its debt repayment budget, while CFE had burned 70% of its budget, as stated in a recent report. Although both budgets amount to MX$104 billion, the payments due this year total MX$352 billion.

The government is expected to postpone the payment of over US$2 billion in taxes to assist PEMEX in addressing its short-term debt. This measure would enable the NOC to free up sufficient funds to pay its suppliers and contractors. The company’s debt with these players has been steadily increasing and reached MX$96 billion (US$5.3 billion) at the end of March 2023, marking an 88% increase compared to the previous year.

Recently, the NOC also announced it would invest an additional US$5.5 billion to implement a secondary recovery strategy for the discovery located off the coast of Campeche bay. PEMEX's updated plan aims to increase production at this field to 150Mb/d by 2030 through additional investments of US$12 billion. The strategy includes drilling new wells for water injection and production, with peak output projected for 2028-2030. 

PEMEX also reported plans to invest US$411 million in the Uchukil field located in the Gulf of Mexico. The field is estimated to contain around 359MMb of crude oil, while the NOC aims to boost output to about 69Mb/d.

PEMEX announced plans to invest MX$1.4 billion (US$78.5 million) in the reactivation of a gas processing plant located in Cotaxtla, Veracruz.

According to CEO Octavio Romero, the renovation project aims to boost the plant's processing capacity from 10MMcf/d to 110MMcf/d. Further expansions are also being considered, which could potentially increase this capacity to 200MMcf/d. The gas processing plant, which is currently 42 years old and in a state of disrepair, will be used for processing gas extracted from PEMEX's flagship Ixachi field, which is playing a crucial role in the growth of natural gas production in Mexico.