Amid Higher Output, Pemex Posts First Profit Since Early 2022

Pemex’s debt is the highest of any oil company in the world and it must pay off billions of dollars of maturing debt this year

Vintage Petroleos Mexicanos (Pemex) signage in the town of Ebano, San Luis Potosi state, Mexico.
By Amy Stillman
May 03, 2023 | 01:19 PM

Bloomberg — Petroleos Mexicanos reported a $3.2 billion profit amid a rise in crude and condensate production, even as its debt continued to climb.

The Mexican state oil company’s net income was 56.8 billion pesos in the quarter. Its oil and condensate production was 1.85 million barrels a day vs 1.791 million barrels a day the previous quarter.

Pemex is struggling to pay down debts that have risen to the highest of any oil major in the world, hindering its ability to take advantage of high oil prices that sent profits soaring for its international peers. President Andres Manuel Lopez Obrador’s pledges to turn around Pemex by ending competitive oil auctions and focusing on easier-to-reach shallow-water and onshore fields has failed to bear fruit.

The company has about $2.5 billion in maturing debt for the remainder of the year. It issued $2 billion in bonds in January to pay off amortizations, and it has received some help from the government in the form of tax deferrals, as well as collateralized credit from banks.

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Deputy Finance Minister Gabriel Yorio told Bloomberg News on Tuesday that the government isn’t considering giving Pemex a capital injection this year. The government would need to provide an average of $10 billion a year to Pemex for the next three to five years to improve its financial situation, according to Saverio Minervini, head of Latin America energy at Fitch Ratings.