© Reuters. FILE PHOTO: The Dos Bocas refinery of Mexico’s state oil producer Petroleos Mexicanos (PEMEX) is pictured during its inauguration, in Paraiso, Tabasco state, Mexico, July 1, 2022. REUTERS / Edgard Garrido
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By Ana Isabel Martinez
MEXICO CITY (Reuters) – Mexican state oil company Pemex is expected to post a rare annual profit this year, with two straight quarters in the black and a surge in crude output from fields new, CEO Octavio Romero told Reuters.
If achieved, it would be Pemex’s first annual profit in more than a decade. Historically high tax bills and large losses from the refinery have kept it in the red for years.
Earlier, on Thursday, the Mexican oil giant reported a second-quarter profit of $6.5 billion, as soaring prices lifted oil companies globally and dramatically reduced tax bills.
In the first half of the year, the state-owned manufacturer’s profits totaled $12.7 billion, compared with a loss of $23 billion in the same period last year.
“Our key decision at Pemex was to invest and keep investing in such a bad, adverse situation,” Romero said in an interview late Thursday, referring to the years before oil prices are much lower.
Mexican prices averaged more than $105 per barrel in the second quarter.
Romero, a confidant of President Andres Manuel Lopez Obrador, downplayed the need to refinance Pemex debt any further, arguing that a healthy revenue stream should be able to cover $2.9 billion in loans. Regular debt payments are due this year.
“I’m betting on it,” he said of the need for new debt management practices, while leaving the door open to what could happen if the situation changed.
Pemex, one of the world’s most indebted oil companies, reported total financial debt of $108.1 billion in filings with the Mexican stock exchange on Thursday. The company also reported that it owes an additional $13.7 billion to service providers.
On a call with analysts after the earnings report, Romero called major ratings agency Moody’s (NYSE:), asking them to reconsider its positive rating on Pemex debt, which is quantified as an investment. due to the company’s underlying financial problems and heavy debt.
The Pemex chief added that he expects the company’s oil production to grow to about 1.9 million bpd (bpd) by the end of the year from 1.7 million bpd currently, thanks to production. volume is about to be obtained from about 40 new priority mines.
“We have many wells coming into operation and many more will be drilled in the near future.”
