Mexico will extend $6.7 billion in debt to Pemex to pay for its debts by 2025
A budget proposal released on Friday showed that the Mexican government plans to transfer 136 billion Pesos (6.69 billion dollars) to Pemex, the state-owned oil company. This will help Pemex to pay its debts and repay loans. Pemex's financial liabilities of $97.3 billion include debt payments on bonds of almost $9 billion. Rating agencies have criticized Pemex for its dependence on government assistance to stabilize its finances. Claudia Sheinbaum took office as president in October. She has stated that the government will continue supporting Pemex, and CFE, a state-owned utility, because of their important role.
Sources say that the incoming Mexican government wants to open Pemex up to oil partnerships.
According to four sources with knowledge of the situation, the incoming Mexican government will encourage the state oil company Pemex, to form equity partnerships with private oil firms, a model that is not popular with the president. This move is to increase reserves in the face of a massive debt. These partnerships will be similar to previous Pemex joint-ventures with private oil companies, known as "farm-outs", that Mexico pursued via an energy reform implemented a decade earlier. This reform allowed oil regulators to allow private and foreign oil firms to partner with Pemex in exploration and production.
Oil Companies Swap Stakes in Mexico
With Mexico's government insisting that energy companies increase oil and gas output before it auctions off more of the country's vast reserves or offers more partnerships with state-run Pemex, firms ranging from foreign majors to local players are scrambling to buy and sell blocks they already own.The negotiations are creating a dynamic secondary market for oil acreage, which could be the only investment opportunity left for firms until leftist President Andres Manuel Lopez Obrador unblocks his predecessor's flagship energy reform…
Pemex Prepays $5.17 Billion in Bond Tender
Mexico's Pemex said on Monday it had paid $5.17 billion in a tender offer to prepay about a third of its bonds maturing between 2020-23, part of President Andres Manuel Lopez Obrador's latest effort to shore up the state oil firm.The company announced the bond tender earlier this month, using a $5 billion capital injection from the Mexican government.In addition, Pemex said it had paid a total of $34.066 million in accrued and unpaid interest on the bonds.In a separate statement, Pemex said it had lowered its debt by about $5 billion, and that would help strengthen its financial position.Citigroup Global Markets, Goldman Sachs, HSBC Securities (USA), J.P.
Mexico, Pemex to Hedge Oil Output
The Mexican government has said in its 2020 budget proposal that it will maintain a strategy of hedging its oil output against lower prices.Mexico’s state oil company Pemex will also continue a similar but separate hedging program. Mexico’s roughly $1 billion annual oil hedge is considered the world’s largest oil trade and the government has made the first moves to launch its program by asking banks for quotes.The budget document said the government had “fiscal shock absorbers” to protect against volatility that could affect public finances.
Fitch Downgrades Pemex Debt to 'Junk'
Fitch on Thursday became the first major ratings agency to downgrade the debt of Mexican oil company Pemex to "junk" status, in a major setback for President Andres Manuel Lopez Obrador's plans to revive the struggling state-run firm.Fitch changed Pemex's credit rating from investment grade to speculative grade, or "junk", with a negative outlook, a day after it downgraded Mexico's sovereign debt, a decision criticized by the Mexican finance ministry.The new rating for Pemex is BB+ and that of Mexico's sovereign debt BBB.A second downgrade by Moody's, which rates the bonds one notch above junk, could result in as much as $16 billion of forced selling by inv
Pemex Requests $8bn Loan Amid Heavy Uncertainty
Petróleos Mexicanos’ (Pemex) US$8 billion bank loan comes amid heavy investor uncertainty over the oil company’s debt load, but lenders wanting to maintain links with Pemex and the left-wing administration overseeing the firm may have little choice but to commit to the financing.The state-backed oil producer is tapping its relationship banks to refinance a chunk of liabilities, a big ask when there is minimal visibility over Pemex’s refining capabilities and doubts over future revenue for a company that was once a darling among fixed-income investors.“No one is excited about it,” said a senior banker following the transaction.“The credit is very difficult.
Mexico to Invite 4 Firms to Bid on Pemex Oil Refinery
The Mexican government will invite four companies to bid in a restricted tender for work building the new Dos Bocas refinery for state oil company Pemex, Energy Minister Rocio Nahle said at a news conference on Monday.Dos Bocas would be Pemex's seventh domestic refinery and is intended to help wean Mexico off growing fuel imports, a major campaign promise of President Andres Manuel Lopez Obrador, who took office in December.Nahle said that the refinery, slated to be built in the Gulf Coast state of Tabasco, has already been granted all required government permits…
S&P Downgrades Pemex
Ratings agency Standard & Poor's on Monday slashed the stand-alone credit profile of Petroleos Mexicanos (Pemex) to 'B-' from 'BB-', piling pressure on the Mexican government to tighten up the debt-laden state oil firm's finances.S&P cut Pemex's outlook to negative from stable, just as it did for the Mexican government on Friday after the market closed. The agency kept Pemex's global investment grade rating at 'BBB+', in line with the government.The peso currency was slightly weaker on Monday after the S&P moves, which followed a string of warnings about Pemex's financial health. At 2:32 p.m.
Mexico Plans $3.6 Bln Relief for Pemex
Mexico's government will inject $3.6 billion into ailing state-owned oil company Pemex, including by reducing taxes paid, company officials said on Friday, a move aimed at improving the firm's balance sheet and preventing a further downgrade to its credit rating.Formally known as Petroleos Mexicanos, the firm holds roughly $106 billion in financial debt, the highest of any national oil company in Latin America.Pemex will receive $1.8 billion in pension liability monetization as part of the new fiscal assistance plan for company…
BHP Approves Funding for BP-led GoM Project
BHP Group, the world's largest miner, said on Wednesday its board has approved $696 million in funding to expand production at the BP PLC-led Atlantis oil project in the U.S. Gulf of Mexico.The move comes about a month after London-listed oil and gas major BP discovered further oil prospects in the Gulf of Mexico, including additional oil in the Atlantis field.
Mexico President's Pemex Plans Rattle Debt-holders
Mexican President Andres Manuel Lopez Obrador's declaration of war on "neo-liberal" economics has shaken investors holding Petroleos Mexicanos bonds, fueling concern about the future of the highly-indebted state oil company he has pledged to revive.Ratings agencies and three managers spoken to by Reuters at funds that either hold Pemex paper or recently sold it said proposals floated by the government to build a new refinery and give the state a bigger role in the oil industry could put fresh strain on the company, which must pay…
Odebrecht unit vows to fight sanctions imposed by Mexico
The Mexican unit of Brazilian construction firm Odebrecht said on Monday it will fight the sanctions announced last week by the Mexican government, dismissing them as unfair and unjustified.Mexico banned federal institutions and state governments from doing business with Odebrecht for 2-1/2 years and fined two units of the companies around $30 million each.The government did not detail what was behind the decisions, but officials said they were related to probes into suspected corruption between the firm and Mexican state oil company Pemex.In an open letter in the Mexican newspaper Excelsior, Odebrecht Mexico said the sanctions imposed were "completely unfo
Mexico's Oil Reform a Boon for Hard-hit Oil Service, Seismic Firms
Oil service and mapping firms still emerging from an industry recession have received a boost from about $800 million of data sales to energy firms considering bidding for Mexican oil and gas blocks. Mexico will on Wednesday hold its most important auction since a 2013 reform ended the 75-year monopoly on the energy sector held by state-run oil firm Pemex. The government of President Enrique Pena Nieto hopes the deepwater sale will attract tens of billions of dollars of investment to turnaround a slump in the country's oil output. Seven previous auctions drew investment pledges of $61 billion.
BP to Move Ahead Quickly Offshore Brazil
Oil major BP Plc plans to move quickly to develop oilfields in the two blocks that it won in Brazil's deepwater oil region on Friday that it sees as a good bet in any price scenario, senior executives said. Brazil awarded six blocks out of eight in an auction on Friday for a region holding estimated reserves of more than 12 billion barrels. BP won two of the blocks in consortia, one with Brazil's state oil giant Petroleo Brasileiro (Petrobras) and another with Petrobras and a unit of Chinese state oil firm CNPC. "We will be anxious to move forward now at pace," Bernard Looney, BP's chief executive for upstream, said after the auction.
Suspected oil thieves kill at least four soldiers in Mexico
Suspected oil thieves killed at least four soldiers in two separate incidents in the central Mexican state of Puebla, the army said on Thursday, as emboldened organized crime moves deeper into the lucrative trade. A group of soldiers went to investigate a report of an oil pipeline theft at around 8:15 p.m. (0115 GMT) on Wednesday night near the village of Palmarito, when they were shot at by a group using woman and children as human shields, the army said in a statement late on Wednesday. The soldiers decided not to return fire, but two of them died in the attack and one more was wounded.
Pemex Posts First Quarterly Profit in Five Years
Mexican national oil company Pemex on Wednesday reported a first quarter net profit of 87.9 billion pesos ($4.7 billion), the firm's first quarterly profit since 2012, on higher sales as crude prices rose despite lower output. During the year earlier period, Pemex posted a loss of 62 billion pesos. Revenue at the company officially known as Petroleos Mexicanos was up 55 percent to 349 billion pesos, according to a filing with the Mexican stock exchange. First-quarter crude production stood at 2.018 million barrels per day (bpd), down 9.5 percent from average output of 2.23 million bpd during the January-March period last year.
Pemex Sharply Reduces Losses as Oil Prices Rise
Mexican state-owned oil company Pemex on Monday reported a much smaller fourth-quarter loss, due in large part to higher crude prices. The loss narrowed to $1.58 billion (32.6 billion pesos) from $9.8 billion a year earlier. "Pemex's finances are today stable with positive trends; however, we believe there is certainly room for improvement," Chief Financial Officer Juan Pablo Newman said on a conference call with analysts. Revenue at the company officially known as Petroleos Mexicanos rose more than 20 percent to $15.67 billion, according to a filing to the Mexican stock exchange.
Pemex Jan crude output drops 10.6% from a year ago
Mexican national oil company Pemex produced 10.6 percent less crude oil in January than in the same month last year, the company said. January crude output averaged 2.02 million barrels per day (bpd), down from 2.26 million bpd during the same month in 2016, according to company data released on Friday. The Mexican government is in the midst of implementing a sweeping energy reform finalized in 2014 that ended the decades-long production monopoly enjoyed by Pemex, formally known as Petroleos Mexicanos. The reform also paved the way for first-ever oil auctions open to private and foreign producers, four of which were concluded last year.
Citi Sees Oil Majors Carving out Modest Role in Hedging
Citigroup said investment banks will remain the main players in hedging energy products even though oil majors are carving out a role in the sector as some banks cut their exposure. Citi, Goldman Sachs and JP Morgan are the top three banks active in commodities trading, while peers such as Barclays and Deutsche Bank have cut back following the 2007-9 financial crisis and the introduction of the Dodd-Frank regulations. Last year, oil major Royal Dutch Shell made a splash by becoming one of the first non-bank counterparties involved in the Mexican government 2017 oil hedging programme, the world's biggest.
