PEMEX Increases Fuel Oil ExportsThu, 05/20/2021 - 18:22
PEMEX reports a 58 percent increase in its fuel oil exports from 2019 to 2020. The NOC sold 109,600 barrels a day. These exports came from an average total of 176,000 barrels a day that PEMEX produced throughout 2020, where 66,400 barrels a day were destined for domestic consumption. Despite this increase, the value of these exports actually decreased 34.4 percent due to the depressed market in 2020, reports Forbes. Another factor that contributed to a decrease in fuel oil’s global market value was an international regulation passed by the UN in 2020 that limits the maritime use and shipping of this commodity to protect ocean ecosystems from pollution.
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Fitch Sends Warning To PEMEX
Fitch Ratings has ratified its previous Mexico sovereign credit rating, which stands at BBB-, but it has issued a warning regarding PEMEX debt. The ratification came with an evaluation of a stable outlook for the country’s standing debt. However, the credit rating agency reported that Mexico’s debt could not be understood outside of its obligations to PEMEX, and that this could spell trouble for the country in the future. This connection limits Mexico’s capacity to improve its credit rating, since the country’s debt could increase if more assistance is given to the NOC or if more of its tax revenue decreases in an attempt to give it more financial maneuverability. “Our rating is restricted by a relatively weak governance, a dim performance in terms of long-term growth and the implication for the government’s finances of its strategy to alleviate PEMEX of its tax burden,” said the agency in a statement.
Judges Freeze Controversial Hydrocarbons Law Definitely
Judges Juan Pablo Gómez Fierro and Rodrigo de la Peza have issued a definite suspension to crucial parts of President López Obrador’s Hydrocarbons Law which recently passed through Congress. The judges argue that the law unfairly re-establishes a monopoly in favor of national oil company PEMEX. When introduced, the bill was met with widespread criticism from the private sector and regulatory watchdogs, nevertheless López Obrador and SENER defend this bill. Both judges assess that the law’s efforts to pull PEMEX once again to the forefront of the sector will negatively impact private investment, hamper competition and eventually increase petrol prices for consumers. Private participants are left defenseless against the contradictions to the status quo established in the 2014 Energy Reform, the judges argued.
“SCJN to decide the future of the Hydrocarbons Law reform”: AMLO
President López Obrador emphasized that the indefinite suspension of the Hydrocarbons Law will be defined by the Supreme Court of Justice of the Nation (SCJN). This comment came after judges Rodrigo de la Peza López Figueroa and Juan Pablo Gómez Fierro suspended the bill, which can still be reviewed. López Obrador said it is a process that will conclude with the court's decision and stressed that "we will monitor compliance with these laws because we defend the popular economy and fight corruption."
US Oil Group Pursues US$100 Million Claim Against Mexico
A US-based service group is seeking US$100 million from Mexico in a claim at the World Bank arbitration court. The group is led by Finley Resources, a company that won two oil tenders in Mexico and has a further service contract regarding drilling operations for PEMEX. The claim alleges that Mexico violated investor protection clauses lodged in trade pacts because it did not honor such contracts.