Mexico’s Pemex Unlikely to Meet Production Targets

Mexico’s Pemex Unlikely to Meet Production Targets
In this Thursday April 2, 2015, handout photo provided by Petroleos Mexicanos (Pemex), emergency boats works to put out a fire at the Abkatun-A Permanente shallow-water oil platform in the Campeche Sound. Three workers are missing following the huge blaze on the platform in the Gulf of Mexico that killed four workers and burned for hours, Mexico’s state oil company said Thursday. (AP Photo/Pemex)

Petróleos Mexicanos, commonly known as Pemex, is unlikely to meet production goals for this year, The Wall Street Journal reported.

The company has faced major obstacles over the past year as the Mexican government opened up the oil and gas market to competition with the company, which had previously been essentially a monopoly. One of Pemex’s rigs also experienced a massive fire earlier this year, which also hit production and earnings very hard.

Bloomberg has reported that the Pemex is trying to pare down its costs in response to low oil prices. The company has also moved to lower rig costs in an effort to encourage more investment. In a specific example, the report noted that four jack up rigs operated by Integradora de Servicios Petroleros Oro Negro had their daily lease rates reduced, going from $160,000 to $130,000.

Pemex is the ninth largest crude producer in the world, but it is struggling to adapt to persistently-low oil prices. The firm has reported losses for 11 quarters in a row.

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