Mexico’s state oil company Pemex posted a $4.4bn loss in the second quarter as crude production continued to slip and global oil prices stayed low. It’s the 15th straight quarterly net loss for Mexico’s largest company.
Pemex’s revenues fell 17.2% from the second quarter of 2015 on a combination of lower gasoline prices in Mexico and lower exports revenues. Crude production fell 2.2% on the year to 2.18m barrels per day, writes James Fredrick.
However, Pemex’s overheads are moving in the right direction and its cost-cutting strategies are finally bearing fruit: operational expenditures fell 54.4% year-on-year. Pemex’s mammoth tax burden also fell year-on-year by 37.5%, thanks in part to an adjustment by the federal government which allows Pemex to pay lower taxes when oil prices are lower.
Pemex’s debt increased in the quarter by 21.8% after new issuances and sustained peso weakness compared to the dollar. Total debt is now $96.2bn.
Still, company executives are optimistic about the future despite the beating they’ve taken since energy reform was passed in 2014.
“Pemex is actively exploring new options provided by energy reform,” said Juan Pablo Newman, the company’s CFO.
At the top of that list is the announcement on July 27 of the farm-out of a stake in the deepwater Trion block. Pemex will be farming-out a 55% stake in the undeveloped deepwater field which holds 485m barrels of 3P reserves. Mexico’s energy ministry expects $11bn is needed to develop the field.
Winners of the auction, which is expected to draw the world’s top international oil companies, will be announced in December.