Pemex, among the 10 most indebted companies on the planet

2001

Pemex’s debt is only surpassed by giants like AT&T and Apple.

After heading the list among the oil companies, the state company Petróleos Mexicanos (Pemex) has become one of the 10 most indebted companies in the world.

The energy giant occupies the ninth position with a financial debt of 116.800 million dollars (million dollars), according to a count prepared by the credit rating agency, Moody’s.

Due to adjusted debt, which considers variables such as the pensions of its workers, the company directed by Octavio Romero Oropeza is located in the second place among the most indebted corporations with 189,000 million dollars.

The first place on the list corresponds to the telecommunications giant AT&T with 180,200 million dollars, and with an adjusted debt level that amounts to 228,284 million dollars.

The rest of the list is made up of companies from all sectors: from technology like Apple, through financials like SoftBank to energy companies like Saudi Aramco.

But, unlike the companies on the list, Pemex has recorded massive losses since the past decade, which deepened during the presidential term of the PRI Enrique Peña Nieto, a management in which the debt doubled to current levels, without reversing the downward trend. drop in oil production or its installed refining capacity, in addition to multiple property damage warned by the Superior Audit of the Federation.

The company’s financial situation was further aggravated by the Covid-19 health emergency, which destroyed the demand for fossil fuels, depreciated the peso against the dollar and caused global cuts in oil production, factors that reduced Pemex’s income and, at the same time, they increased their debt.

As a result, the firms Moody’s and Fitch downgraded Pemex’s credit rating to speculative grade, a formal term for ‘Junk bonds‘.

The government of President Andrés Manuel López Obrador tried to stop the financial hemorrhage with reductions in the company’s tax burden, in addition to capital injections and budget increases, despite the health crisis and cuts in multiple areas of public administration.

Nymia Almeida, an analyst at Moody’s, commented in an interview that, although the Mexican government promised not to indebt Pemex further, the debt has increased from December 2019 to March 2021,

“The exchange rate even went down,” he added.

López Obrador’s energy goal for Pemex is to increase its crude production, reduce exports, reduce fuel imports through the rehabilitation of its six refineries and the construction of one in Dos Bocas, Tabasco, while the world tries to move towards the use of of renewable energies and electric vehicles to reduce polluting emissions.

“The resources generated from the operation are not enough for the capital and financial commitments of the company,” concluded Almeida.

The Moreno president has reiterated that he will support the company against its financial commitments since its rescue is the main pillar of its energy policy.

The failure of AMLO’s energy sovereignty smells like gas

The AMLO government bases energy sovereignty on reducing gasoline imports, but dependence on US gas is growing.

Photo: Presidency.
  •  President Andrés Manuel López Obrador, the energy sector slides between the fragility of the current legal framework, the capture of regulatory bodies and a policy that seeks to regain the dominant power of its state companies, given its promise of energy sovereignty.

Despite the severe economic crisis caused by the Covid-19 pandemic, translated into millions of workers laid off and the closure of thousands of small and medium-sized companies, government goals remain, while an energy dependence with abroad is consolidated: importation of natural gas.

The current administration has allocated 2 trillion pesos from taxpayers to the strengthening of Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE), while the authorities suspended more private competition in the sector, by limiting participation to service contracts towards these companies, while the president has expressed that he does not private businesses are interested.

The main objective of the self-styled government of the “Fourth Transformation” (Q4) is to end the importation of fuels, mainly gasoline and diesel, with less crude exports and greater domestic refining. The López Obrador administration is even building an 8.9 billion dollar refinery in Dos Bocas, Tabasco, to accelerate this goal.

“In 2023 we will stop importing gasoline because we will achieve self-sufficiency with the entry into operation of Dos Bocas and the modernization of the six existing refineries,” said the Tabasco politician during the speech for his second year in office.

Q4 also intends for the CFE to resume its leading role in electricity generation and to produce in 2024 at least 54% of the electricity that the country demands and the rest would come from private initiative.

Natural gas is the main input for electricity generation and heavy industry activities, in addition to Pemex’s own consumption on its platforms; In spite of this, this energy company has dragged on 10 years of productive decline.

A sample button: in 2020, almost 70% of the electricity generated by CFE was produced with natural gas and 64% of this came from the United States, so the strengthening of the company led by Manuel Bartlett Díaz is risking not only the sovereignty, but the energy security of the country in the face of the energy shortage.

On November 30 of this year, the president and the private initiative revealed an energy infrastructure plan that includes the construction of 6 combined cycle power plants of natural gas and steam, promoted by the state company.

“Now the priority is to stop importing gasoline, but it is much more strategic to stop importing gas, not only for sovereignty, but for energy security,” says Marco Cota, CEO of the consulting firm Talanza Energy.

Although the Mexican government has said that there will be greater gas production associated with Pemex’s priority fields, they face a 55% delay in its development and the company only extracts 186 million cubic feet per day from the deposits, in contrast to the 519 million it estimated for this year.

Even if Pemex achieved this goal, it would still be far from offsetting national consumption, as this amounts to 7,972 million cubic feet per day on average this year and national gas production only covers 31%, according to data from the Ministry of Energy. (Sener).

Graphic: Sener.

In addition to this, the National Center for Natural Gas Control (Cenagas) foresees that the demand for energy will almost double to 14,500 million cubic feet per day at the end of the Tabasco politician’s six-year term.

“Mexico is depending in gigantic proportions on imported gas to generate electricity. There does not seem to be a sovereignty problem that depends on a single country: the United States ”, agrees Ángel de la Vega, professor and researcher specialized in energy and economics at the National Autonomous University of Mexico (UNAM).

Another problem is that, unlike gasoline, our country lacks storage capacity for natural gas.

Although Mexico is the main trading partner and buyer of energy from the United States, both experts do not rule out that this relationship is affected by US interests to export it to other markets, such as Europe, or have greater domestic consumption or even that there is a an increase in the price –currently the cheapest in the world–, which could complicate the finances of the State’s productive company to generate electricity through technologies such as the combined cycle.

In the international context, Mexico is the country that depends to a greater extent on this input to produce electricity, since countries such as Turkey, Japan or Italy do not exceed 45% of electricity generation with natural gas, according to an analysis by the National Hydrocarbons Commission (CNH).

Mexico, the second most important economy in Latin America, has an enormous gas potential estimated at 217 trillion cubic feet, although 65% of the resources to be discovered are in areas that require hydraulic fracturing, a technique known as fracking, at the same time. that President López Obrador has opposed due to its high water consumption. However, the remaining potential is in areas that allow conventional extraction.

Source: forbes.com.mx

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