PEMEX May Owe Billion-Dollar Debt to SLB and Halliburton

Schlumberger (SLB) and Halliburton, two of the world’s largest oil field services companies, have recently alerted their investors to the growing issue of unpaid services in Mexico. Even though PEMEX was not mentioned by name, reports suggest the NOC is mainly responsible f or the issue. According to the companies, the magnitude of this problem has increased over the past three months.

According to Bloomberg Línea, SLB has approximately US$1.2 billion of receivables related to Mexico, which is 20% higher than the amount registered at the end of 2022. In addition, at the end of 2021, the company was owed US$500 million. In a separate statement, Halliburton disclosed the same concerning trend, an issue that industry insiders have experienced in the Mexican oil and gas market for years. Halliburton revealed that the unpaid bills from one of its “major customers” in Mexico have risen to account for a larger portion of its overall bills.

Both Schlumberger and Halliburton have affirmed that there is no disagreement or dispute regarding the amount of outstanding payments. Additionally, they stated that they have not suffered any material losses due to PEMEX.

Mexico's state-run oil company PEMEX has been grappling with financial issues and has intermittently accumulated debt to providers, including major players like SLB and Halliburton as well as a slew of smaller oil companies. However, the NOC has repeatedly assured its stakeholders that it can meet its financial commitments despite its indebtedness. 

As of the end of 2022, PEMEX's debt had reached US$107.7 billion, a financial burden that has raised concerns about the company's long-term viability. In response to these concerns, the Mexican government announced plans to provide financial support to the state-owned oil company. Gabriel Yorio, Deputy Finance Minister, said approximately US$2 billion in taxes owed by PEMEX to the state will now be deferred, providing the company with some relief and bolstering its capacity to address its debt. This move reflects the government's commitment to supporting the Mexican oil sector.

"We can do this quickly to provide liquidity to PEMEX, not through capitalization, but by allowing it not to immediately pay the royalty, the profit-sharing rate," said Yorio. "That roughly gives them US$2 billion in cash flow,” he added.

Aiming to ensure timely payments to suppliers and contractors, PEMEX launched a payment mechanism in May 2022. The mechanism is based on bonds issued by the state-owned oil company and intends to provide a reliable means of payment for large suppliers. The NOC’s Board of Directors deemed it important to execute "the necessary financial mechanism to ensure that timely payments to suppliers and contractors of PEMEX and its productive companies subsidiaries.” By providing a reliable payment mechanism, PEMEX aims to improve its relationships with its suppliers and promote a more stable and sustainable industry.