TC Energy Boosts 2023 Spending; PEMEX Grapples with Debt
TC Energy reported an increase in its capital expenditure for 2023. Its plans include enhancing natural gas pipelines in Canada, the US and Mexico. Meanwhile, PEMEX finds itself juggling with financial tools to carry out the payments of its debt due for 1H23. The government has vocally and financially backed up the NOC.
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TC Energy Foresees Increased CAPEX in 2023
Canadian energy company TC Energy plans to increase capital expenditure by 30% year-over-year in 2023, with most of the resources set to expand natural gas pipelines in the US, Canada and Mexico. In Mexico, TC Energy is planning to invest US$2.1 billion to advance construction of the Southeast Gateway, Villa de Reyes and Tula pipelines, with a renegotiated transport service agreement with state power utility CFE expected to lead to higher earnings from its Mexico natural gas pipelines segment.
PEMEX in Talks with JP Morgan, Goldman Sachs Regarding Financing
PEMEX is in talks with JP Morgan and Goldman Sachs to refinance about US$1 billion of its debt. The NOC seeks to find some liquidity by refinancing its debt. The administration’s strategy for PEMEX had been previously qualified as deficient by Moody’s since the indebted company’s refining focus had cost it more losses. However, the government stands firm in its decision to strengthen the state company.
CNH Meets With ASEA, ANPHI to Enhance Collaboration
CNH met with the Mexican Association of Hydrocarbon Producers (ANPHI) and joined efforts with the Agency of Security, Energy and the Environment (ASEA). Regulatory concerns stand at the core of the energy dispute between the USMCA partners. The Mexican government has deployed different strategies to tackle some of the concerns expressed by its commercial partners.
PEMEX plans to pay its debt due for 1Q23 on its own, with no government help and without resorting to the emission of more debt in the market. The government would grant support to PEMEX but only if it was necessary and oil prices tumbled. Mexico protects the Mexican mix should it fall below the US$68.7/b mark.
Government Depleted Special Tax Funds to Contain Fuel Price Hike
Mexico's Minister of Finance, Rogelio Ramirez de la O, stated that the federal government has depleted its reserves of the Special Tax on Production and Services (IEPS). Furthermore, PEMEX contributed only MX$137 million (US$7.4 million) to the Treasury for Hydrocarbon Exploration Rights in January 2023 and did not provide anything for the Shared Profit Rights and Hydrocarbon Extraction Rights categories.
Oil And Gas Concessions Could Break The Net-Zero Banking Alliance
Internal tensions are escalating within the Net-Zero Banking Alliance, with members expressing frustration over the continued financing of oil and gas by less committed banks. The alliance, an offshoot of the Glasgow Financial Alliance for Net Zero, reportedly made concessions to retain Wall Street banks, leading to dissent among banks with ambitious emission pledges. GLS Bank, a German lender, has already left the alliance, according to a Bloomberg report.
EU Fails To Reach Fossil Fuels Phase-Out Deal
EU foreign ministers were unable to agree on rules for phasing out fossil fuels during Monday's meeting. The debate centered around whether nuclear energy should be included in the transition to cleaner energy. The EU aimed to present a unified policy on the issue at the upcoming UN COP28 summit in December. The proposed text calls for a global phase-out of coal, highlighting the risks of fossil fuel dependency. However, not all EU members supported the idea.