Mexico’s Pemex, ‘punished’ by markets, ponders how to repay heavy debt | – #Mexicos #Pemex #punished #markets #ponders #repay #heavy #debt
MEXICO CITY, March 8 (Reuters) – Mexico’s heavily indebted state oil company Pemex will try to avoid expensive capital markets even as it faces billions in maturing debt this year and next, its chief executive said Pemex was being “punished” by Reuters- he said. by rating agencies despite measurable improvements in the number of transactions.
About 108 at the end of last year billion dollars Pemex with the financial debt that ended this year, about 8.2 billion dollars and 9 more in 2024 billion dollars more bonds and long-term bank loans must pay.
Variable credit When other liabilities such as lines and interest are included, Pemex faces $24 billion in payments this year, putting the company in a difficult refinancing position.
“We are exploring all (options),” the company’s chief executive Octavio Romero said in an interview at his office in Mexico City on Tuesday afternoon, with potential lenders looking at crude-backed guarantees. offer said that they did not rule out the possibility of doing so.
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Romero’s boss, the president Andres Manuel Lopez Obrador has long advocated stronger state control of the energy sector and has repeatedly vowed to “save” the Mexican oil giant at all costs.
January Asked whether Pemex would avoid going back to the debt markets after a particularly expensive bond issue in 2016, he said: “Yes, yes, we will try to find the best, cheapest mechanism.”
Romero said he hoped Pemex would seek more help from the state treasury – but he did not rule it out.
“This is a great benefit of two very important government agencies joining hands,” he said, referring to the Finance Ministry and Pemex, Mexico’s largest company and largest contributor to state revenues.
Romero ‘punishes’ Pemex bonds by declaring them speculative-grade or junk credit responded to rating agencies, making borrowing more expensive. According to him, the institutions are ignoring the progress made by the current administration in increasing production, reducing debts and keeping reserves stable.
2020Fitch Ratings and Moody’s Investors Service were the first two major rating agencies to downgrade Pemex from investment-grade status in 2011, with the latter downgrading it further to speculative grade last year.
Moody’s, Standard & Poor’s and Fitch Ratings declined to immediately comment.
Pemex high oil prices It made a paltry profit of about $1.2 billion last year, despite wiping out some of its debt under new management amid an oil boom that boosted revenue by 60% to $123 billion. Much of it was eaten up by higher costs, including the purchase of petroleum products for resale, finance charges, taxes and duties.
OIL AMBITIONS
After years of frequent large losses, Pemex’s recent increase in profitability USAIt happened with record profits of private oil companies such as Chevron Corp and France’s TotalEnergies.
At the end of January, Pemex is in the market to refinance some debts 10worth $2 billion with an interest rate of 375% 10 issued annual bonds.
With this, he has invested capital in the company over the past four years and tax avoided touching again on the government’s lifeline, which provided about $45 billion in concessions.
Pemex now forecasts that it will increase crude oil and condensate production to 2.0 million bpd by early 2024 from 1.69 million bpd in 2022.
This production target of Lopez Obrador 2018At the start of his administration at the end of 2010, Pemex significantly scaled back his initial oil ambitions when he promised to increase production to 2.6 million barrels per day.
Romero, a longtime López Obrador confidant who had no experience in the oil industry before taking the helm at Pemex, said the goal would be reached with 37 oil fields developed since 2019.
These projects are the company’s largest, outdated the natural decrease of deposits partially compensation while contributing approximately 507,000 barrels/day.
“The growth we’ve already had … is because we’ve already completed a large part of the infrastructure,” he said.
The Pemex chief said he also sees the company turning a profit this year on expectations that Mexican crude will average at least $70 a barrel.
According to him, carrying out more pumps will allow us to comfortably meet the demand for crude oil and fuel in our country.
Reporting by Ana Isabel Martinez; Edited by David Alire Garcia, Isabel Woodford and Daniel Wallis
Our standards: Thomson Reuters Trust Principles.
2023-03-08 23:44:18
Source – reuters
Translation“24 HOURS”