Pemex Swings to Profit, But Provider Debt Hits Record

© Brenda Blossom / Adobe Stock
© Brenda Blossom / Adobe Stock

Mexico's Pemex reversed losses in the last three months of 2023 but its overall debt burden remained the highest of any oil company in the world, with billions of dollars due to bond holders and service providers.

The state-run company posted a profit of 106.9 billion pesos in the fourth quarter of last year, a filing with the stock exchange showed on Tuesday, as both costs and tax obligations declined.

Chief Executive Officer Octavio Romero said during the earnings call that the results showed important improvements in the debt profile, and vowed to pay providers this year.

Pemex's total financial debt stood at $106.1 billion at the end of last year. Debt to providers exceeded 359 billion pesos, up 27.5% from the end of the previous year and the highest ever recorded, even after the company paid 413.9 billion pesos to providers throughout 2023.

Pemex received 127.7 billion pesos in financial support from the government, and 25 billion pesos of that went toward the Dos Bocas refinery. Much of the rest was used to pay down debt.

Last year marked the fifth under President Andres Manuel Lopez Obrador, who has made domestic refining a top priority.

Romero said the new refinery, which is running behind schedule and over budget, was set to start operations "in the coming weeks".

"The good results pave the way for a favorable outlook for Pemex," Romero said, reiterating that the company had full support from the government and that management disagreed with a recent ratings cut by Moody's Investors Service.

Pemex posted revenues of 425.5 billion pesos in the October-to-December period, the filing showed.

Crude oil and condensate production reached 1.86 million barrels per day (bpd), with 566,300 bpd pumped from new fields. In local refineries, Pemex processed 731,000 bpd.

(Reuters - Reporting by Ana Isabel Martinez, Adriana Barrera, Valentine Hilaire and Stefanie Eschenbacher Editing by Anthony Esposito and David Gregorio)

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