Mexico announces plans to reduce debt of Pemex and boost investment

Mexico's government announced on Tuesday a plan to move its heavily indebted oil company Pemex towards financial independence, as well as the creation of a new vehicle for investment and efforts to stabilise oil production.

Claudia Sheinbaum, the president of Pemex, said at a recent press conference that the company "will not need the support of the finance ministry" by 2027. She was referring to government support received to reduce debt.

She said that "Pemex will have enough revenues to pay off its debts, amortizations, and have a sufficient budget to make the investments it needs."

Pemex, the world's largest energy company by debt, reported last week that it owed $98.8 Billion.

The Mexican government announced that week a debt offer of $12 billion to help ease Pemex’s short-term pressures on finances and assist in debt refinancing.

Pemex's Chief Executive Victor Rodriguez, who spoke after the President, outlined several operational measures to support the Plan, including the development of Zama and Trion and the reactivation of other fields that have potential.

In an effort to boost production, officials also announced the creation of a new investment vehicle backed by the government that will raise up to $250 billion pesos (about $13 billion) in this year.

Pemex also plans to build three additional pipelines. Pemex will adjust its pricing formulas to improve profitability.

(source: Reuters)