Pemex, Mexico’s state oil company, is hoping that an infusion of capital from private equity firms and other foreign investors will help it stave off a pressing liquidity crunch, Platts reported.
Pemex, which is going through a number of key reforms, is suffering from not only lower oil and natural gas prices, but also has had to increase its debt to fund outflows for taxes, duties, and capital spending, all while seeing a roughly 6.7% year-over-year oil production decline.
The company, responsible for providing close to 25% of the Mexican government’s annual budget from its operating cash flow, posted a $10b loss in Q3 of 2015, making it the 12th consecutive quarter of recorded losses. In the first nine months of 2015 the company filed a loss of approximately $19.4b.
New CEO, Jose Antonio Gonzalez Anaya’s, first priority is to “assume the new reality for Pemex” of low oil prices. Pemex’s budget was crafted with $50 per barrel of oil in mind; but with prices closer to $25 a barrel, the company, as many others, needs to cut expenditures to account for lower income.
Anaya is looking to cut corporate expenditures and adopt efficiency program. Prioritizing investments to direct operating expenditures towards the most profitable wells and fields is another high priority on the agenda, Rigzone reported.
