Higher tax payments and foreign exchange losses pushed Mexico's Petroleos Mexicanos back into the red in the third quarter, even as crude production recovered somewhat, the state oil company said on Thursday.
Pemex lost 77.2 billion pesos ($3.7 billion) compared to a profit of 1.4 billion pesos in the same period last year, and it was also a setback compared to the second quarter, when Pemex logged a net profit of 14.4 billion pesos.
Still, new oil fields in operation since 2019 produced 280,000 barrels per day (bpd), helping to lift average output to 1.74 million bpd in the quarter, Pemex said. Crude processing was up 15% year-on-year in the quarter to 695,000 bpd.
"The timid increase in crude production has not been substantial enough to improve their outlook," said Arturo Carranza, director of energy projects at Akza Consultores.
"Internal factors, like its excessive tax burden, had a negative impact. External factors, like the fluctuation of the dollar versus the peso, also increased costs."
Pemex has the largest tax obligations of any company in Mexico and contributes some 16% to state coffers. Foreign exchange losses were 47 billion pesos for the third quarter, in which Pemex reported revenues of 384.7 billion pesos.
Pemex's financial debt, much of which is issued in dollar-denominated bonds and held widely by investors around the world, stood at $113 billion. Between October and December, $1.557 billion in debt repayments are due, the company said.
Alberto Vazquez, chief financial officer, said the company had not ruled out tapping bond markets in 2022, and was in constant talks with the finance ministry.
President Andres Manuel Lopez Obrador has pledged to revive Pemex and has pumped billions of dollars in financial support for the company. But some financial experts say it is not enough.
"Instead of seeking to further reduce Pemex taxes, they should reduce their operational and financial burden to bring it in line with that of private upstream companies," said Emily Medina, a fellow at the Energy Policy Research Foundation.
Medina said Mexico should also lower costs in projects like the president's new Dos Bocas refinery, seek efficiency gains and prioritize investment in profitable areas.
Lopez Obrador has moved aggressively to strengthen the state's role in the energy sector via Pemex, whose fortunes contrast with those of Brazil's Petroleo Brasileiro (Petrobras), which President Jair Bolsonaro is considering privatizing.
Petrobras reports its third-quarter results later on Thursday.
($1 = 20.6420 pesos at end-September)
(Reporting by Ana Isabel Martinez, Stefanie Eschenbacher and Noe Torres; Editing by Chris Reese, Aurora Ellis and Marguerita Choy)