Weatherford claims oilfield activity has returned to normal in Mexico, and the company is getting paid

Weatherford International, a U.S. oilfield service firm, said on Wednesday that oilfield activities in Mexico have 'normalized' and they are now starting to be paid. A 'new financial mechanism? helped raise funds for the state-run energy company?Pemex? to pay their suppliers after many delays.

Pemex has been accumulating billions of dollars of pending payments for contractors and suppliers in recent years. This led to a significant reduction in oilfield services companies' activities. Since last year, a payment mechanism approved by government to'secure up to 13 billion dollars for companies involved with oil projects' has 'contributed to debt amortisation.

Weatherford CEO Girish Saligram said on the company's quarterly earnings conference call: "We are very happy that activity levels have normalized and we are now starting to be paid."

"We believe that stability will continue at the activity level... "I think it will be a bright point in the coming years," he said.

Anuj Dhruv is the Chief Financial Officer of Weatherford. He did not identify the customer by name, but said that the total amount owed by Weatherford's main Mexican customer was $283 million on March 31.

Dhruv stated that Weatherford received large payments from this?customer in the fourth and first quarters.

Dhruv stated that since the changes were made, Weatherford's biggest?customer? in Mexico has been paying Weatherford like clockwork.

We expect this trend will continue. We expect collections in the second quarter as well as the back half of this fiscal year, he said.

Mexico's government announced in August that it would cease funding Pemex after 2027 when the company should be financially independent. In the last?year, Pemex paid out 13 billion Mexican pesos to contractors and suppliers, leaving a balance of $24 billion.

(source: Reuters)