Mexico’s state-owned oil company Pemex will reduce its investment budget by MXN40.5bn (US$1.7bn) in 2020, in a context of lower oil demand and falling oil prices. The cut in Pemex’s capital expenditures is part of a larger MXN113bn (US$4.7bn) financial package aimed at improving the financial situation of the company, which includes a MXN65bn (US$2.7bn) reduction in fiscal obligation owed to the Mexican government.
Pemex produced 1.68 mb/d in 2019, representing a 7% drop compared to 2018, and a fall of 50% in comparison with 2014 when the company produced 3.4 mb/d. Pemex refined 592,000 bbl/d of crude oil in 2019, against 612,000 bbl/d in 2018. Crude oil exports dropped by 80,000 bbl/d and average price of crude oil exports fell by 9%. Consequently, Pemex’s revenue declined by 16% in 2019 to USD74.5bn and losses reached US$18.4bn, a 92% increase compared to 2018. Its total debt stood at US$105.2bn (-0.6%). The new fall in global oil prices in the first quarter of 2020 will reduce its revenues.