SBL Receives Overdue Payment from PEMEX

SLB is recovering a US$560 million payment from PEMEX, a portion of the US$1.015 billion owed, reported Reuters. This transaction comes under scrutiny as PEMEX faces severe criticism for non-payment issues with suppliers, potentially impacting production, investment, and supplier viability.

SLB, formerly Schlumberger, revealed on Wednesday it received US$560 million from PEMEX’s debt involving a financial loan contracted by PEMEX, mediated through a third-party financial institution. SLB's 2023 annual report highlights that the NOC is its primary client in Mexico and constitutes 13% of its accounts receivable.

During 4Q23, SLB issued a credit default swap (CDS) for an amount of US$275 million, relating to a guaranteed loan provided by the financial institution. In January 2024, this notional amount was increased to US$560 million. The CDS is structured to undergo monthly reduction over its 26-month term, with its fair value considered immaterial as of Dec. 31, 2023.

PEMEX, grappling with financial debt exceeding US$105 billion, primarily in the form of widely held bonds, faces an additional US$17.22 billion in provider debt, as indicated by the company's own data, with specific amounts owed to companies like Fieldwood, Petrobal, SLB, Halliburton, and Baker Hughes. The mounting debt with oil service providers and private crude oil and gas producers poses a multifaceted threat, jeopardizing ongoing activities, production goals, and the very survival of suppliers.

Industry experts, including the Mexican Association of Hydrocarbon Companies (AMEXHI), caution against the consequences of PEMEX’s debt to its suppliers. Overdue payments not only jeopardize ongoing activities and production goals but also pose a severe threat to the financial viability of extraction projects already in progress. 

AMEXHI, in a letter to the government, raised concerns about PEMEX’s non-payment, emphasizing its detrimental impact on oil activities, production goals, and extraction project viability. The absence of direct dialog to establish payment plans has further heightened uncertainty. Reuters warns that due to non-payment, "some service companies could die on the way," emphasizing the urgent need for resolution and collaborative solutions in the oil and gas sector.