Pemex evaluates debt payment alternatives with the Treasury

Mexican oil weighs debt payment options with the finance ministry as the company struggles to turn high oil prices into profit amid weak production and a focus on refining rather than exporting its crude.

The general director of Pemex, Octavio Romero Oropeza, said that since the last quarter of 2022 he has been in talks with the Ministry of Finance to find an option for Pemex to pay its soon-to-mature debt because amortizations are not included in the budget. He pointed out that high oil prices would allow Pemex to find alternatives.

“We already have several alternative solutions”he said Wednesday during the president’s daily press conference, adding that Pemex has between $5.5 billion and $6 billion in debt repayments due in the first quarter.

Pemex It is the most indebted oil company in the world, with a financial debt of US$105 billion. The company is under enormous financial pressure as the Mexican government wants it to halt oil exports and invest in loss-making refineries, even as it tries, and fails, to reverse long-term oil production declines.

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President, Andres Manuel Lopez ObradorHe said that, if necessary, the government would intervene to help pay off Pemex’s debt.

Bloomberg reported Tuesday that Mexico’s finance ministry is seeking Pemex to pay down debt due in the first quarter without government help, according to people with knowledge of the situation. After providing financial support to oil in recent years, the finance ministry now wants Pemex to pay off its debt unless it does not have enough cash for this target at the end of the quarter, one of the people said.

Romero said Wednesday that Pemex has been reducing its debt. “We are doing it jointly (with the government) and we have no problems.”