PEMEX Starts Paying Large Suppliers

PEMEX began to settle its debts with suppliers, prioritizing large oilfield service companies over emerging private producers, as reported by Reuters. The NOC faced heightened scrutiny regarding its outstanding debts to suppliers over recent months. PEMEX ceased reporting its payment obligations with suppliers and contractors on its portal, raising concerns about financial transparency. 

At the end of 3Q23, PEMEX disclosed owing suppliers US$17.4 billion, according to Reuters. PEMEX initiated payments totaling hundreds of millions of dollars to key service providers such as SLB, Weatherford, and Halliburton. Prioritizing payments to major service providers helped prevent disruptions to PEMEX's own operations. Meanwhile, other private oil companies delivering their production exclusively to PEMEX experienced an average delay of six months in payments.

SLB and Weatherford disclosed significant payments from PEMEX in their annual reports. SLB received US$560 million in 4Q23, while Weatherford received US$140 million during the same period and an additional US$142 million in January. A source within PEMEX indicated intentions to "enhance" payment performance in the next quarter, utilizing a portion of recent tax cuts to address outstanding debts.

In its recent financial report, PEMEX disclosed profits for the past year. Despite solid gains in 4Q23, aided by reduced taxes and lower cost of sales, PEMEX's supplier debt surged by 27.5%, reaching MX$359.760 billion.

While reporting a net profit of MX$106.936 billion, contrasting with a loss of MX$95.502 billion in the same period of 2022, PEMEX's total revenues decreased by 17% annually to MX$425.532 billion in 4Q23. The company's substantial financial debt rose to US$106.1 billion by the end of 2023, compared to US$105.8 billion reported in the previous quarter.

The Government has provided significant financial assistance to PEMEX to improve its financial situation and fund exploration and extraction projects. President Andrés Manuel López Obrador has stated that this support will persist until the end of his term in October. Octavio Romero, PEMEX’s CEO, highlighted the ongoing collaboration between PEMEX and the federal government, noting that key issues are regularly discussed in meetings attended by the president.