A Week of Approval for PEMEXBy Pedro Alcalá | Mon, 06/07/2021 - 11:29
Last week saw a number of positive news items regarding PEMEX’s strategy, its public perception and its current market standing.
The first news to hit the headlines in Mexico’s main newspapers was that Barclays positively evaluated the NOC’s purchase of Deer Park. In a public statement, the financial institution claimed that the purchase placed PEMEX in an “advantageous” position which gives it “an opportunity to significantly increase its refining capacity, within its current strategic framework which is meant to increase its independence in the refined products market.” However, they also pointed out that the purchase placed the NOC at a risky position in terms of its long-term outlook, given the fact that the future of the refining sector remains quite uncertain. However, Barclays believes that PEMEX made the right choice by purchasing the refinery, because its facilities have a history of efficiently processing Mexican Maya Mix crude, reports La Jornada.
It is not just financial institutions that are expressing their approval of the path that PEMEX has chosen. According to a survey conducted by El Financiero Bloomberg of 2000 Mexicans, 47 percent of the people surveyed approve of the Deer Park purchase, with 38 percent saying that they did not approve and the remaining 15 percent claiming not to be sure. An internal document revealed the full cost of the refinery will be US$863 million, which is US$263 million more than the price that was mentioned in the original announcement, reports El Universal. Most of the extra cost comes from PEMEX’s obligations to pay for all of the pension plans of the refinery’s existing workforce.
More good news for PEMEX came from the market, where the price for a barrel of the NOC’s crude oil reached US$65, which is US$15 higher than the level it was expected to reach this year, reports Aristegui Noticias. Because some of these expectations have been surpassed, PEMEX will have an opportunity to revise its financial plans for the year and expand its investment agenda under the assumption of a significant increase in its revenue. This could also result in more resources used to tackle its debt and the payments it owes to some of its most important suppliers. Business analyst Enrique Galván Ochoa explained that the impact of this increase on the federal budget could be immediate.