Mexico’s PEMEX Doomed Despite Government Bailout
EspañolThe financial bailout of 73,500 million pesos awarded by the federal government to Petróleos Mexicanos (Pemex) will allow the business to reduce two-thirds of its debt, but is still not enough to clear it of all bad finances, Director José Antonio González Anaya said this week.
In an interview with Financial Times, the official provided the company’s results from the first trimester of 2016, which show that Pemex is set to have a worse start to the year than in 2015.
The support granted by the government will permit Pemex to reduce two-thirds of its debt to collectors, that for the end of 2015 reached $150,000 million Mexican pesos, as well as to address the obligation to fill pensions.
“The first step is to have stable finances. I believe that we will achieve that,” said González Anaya.
However, when asked if the results of the first trimester would be a worse start to the year than last, Anaya said: “Yes, I believe so.”
And to the question of whether aid from the Mexican government would be sufficient to rescue Pemex, he said, “We will have to see.”
Anaya told the Financial Times that one condition made by the government was that the company had to make changes to their financial, which spent nearly $50,000 million pesos last year.
“Financial relief is permanent.,” he said. “This gives us a platform for moving forward.”
However, John Padilla, Managing Director of IPD Latin America, a financial consulting firm, was less optimistic than Anaya.
“This (government assistance) clearly doesn’t resolve the structural problems underlying their company,” he said. “They are … hoping and praying that Pemex can find a solution on its own.”
The newspaper said that while other oil companies have cancelled plans to increase spending and made painful job cuts, Pemex’s plans remain a mystery.
“We are cutting $100,000 million pesos — it can’t get more aggressive than that, “Anaya told the newspaper when questioned about plans for cuts.
[adrotate group=”8”]Anaya assured Financial Times that there are a “few dozen firms” eager to do business with Pemex and that the United States is interested in its refineries.
For the last 12 years, the price of petroleum in the world has fallen, and last Sunday the largest countries producing it failed to come to an agreement on the oil extraction freeze in Doha, Qatar. Anaya said Mexico will be affected by this fall in prices.
“It is a major challenge,” he said. “How are we going to do this? Only with strong partnerships.”