PEMEX “Fails” Environmental TestThu, 06/10/2021 - 18:03
An independent study center called México Evalua has published a report which refers to PEMEX as one of three oil and gas companies that currently hold the highest level of ESG (Environmental, social and governance) risk. What this means is that its ESG practices are considered the “most risky” of the sector. The other two companies are the Chinese Guanghui Energy and the American Parsley Energy. According to the study, the majority of these risks are focused on PEMEX’s downstream operations, specifically the emissions and environmental practices of its refineries. The study also highlights the case of the Tula refinery, which is creating severe risks of groundwater contamination which can endanger agricultural activity in the area.
Ready for More? Here’s the Week in Oil & Gas!
Changes to Hydrocarbon Law Suspended Definitively
A judge has approved a definitive suspension to all changes to the Hydrocarbon Law which passed both chambers of Congress earlier this year. Judge Juan Pablo Gómez Fierro conceded this suspension, thus making the legal proposals null and void of all effects. The suspension was granted as a result of the objections raised by the company Process Fuel. The legal changes were focused on the reform of article 13 of the Hydrocarbons Law, which dictated that PEMEX had to be subject to an asymmetric regulation in the downstream market so that it did not have an unfair advantage over its competitors. The intention of these legal changes was to eliminate this asymmetric regulation and provide additional support to PEMEX.
Barclays Positively Evaluates Deer Park Purchase
Barclays has positively evaluated the NOC’s purchase of Deer Park. In a public statement, the financial institution claimed that the purchase placed PEMEX in an “advantageous” position which gives it “an opportunity to significantly increase its refining capacity, within its current strategic framework which is meant to increase its independence in the refined products market.” However, they also pointed out that the purchase placed the NOC at a risky position in terms of its long-term outlook, given the fact that the future of the refining sector remains quite uncertain. However, Barclays believes that PEMEX made the right choice by purchasing the refinery, because its facilities have a history of efficiently processing Mexican Maya Mix crude.
Majority of Mexicans Approve of Deer Park Purchase
According to a recent survey of 2000 Mexicans, 47 percent of the people surveyed approve of the Deer Park purchase, with 38 percent saying that they did not approve and the remaining 15 percent claiming not to be sure.
Deer Park Will Be More Expensive Than Expected
An internal document revealed the full cost of the Deer Park refinery will be US$863 million, which is US$263 million more than the price mentioned in the original announcement. Most of the extra cost comes from PEMEX’s obligations to pay for all of the pension plans of the refinery’s existing workforce.
Oil Barrel Price Defies PEMEX Expectations
The price for a barrel of the NOC’s crude oil reached US$65, which is US$15 higher than the level it was expected to reach this year. Since some of these expectations have been surpassed, PEMEX will have an opportunity to revise its financial plans for the year and expand its investment agenda under the assumption of a significant increase in its revenue. This could also result in more resources used to tackle its debt and the payments it owes to some of its most important suppliers. Business analyst Enrique Galván Ochoa explained that the impact of this increase on the federal budget could be immediate.