The PEMEX Project Funding Master Trust-Bond has a 6/14/2038 maturity date and a 6.6250 percent coupon.
Is Pemex a public company?
As Mexican President Andres Manuel Lopez Obrador aspires to extend state control of the country’s energy markets and expand refining capacity, the Deer Park purchase would ensure essential U.S. gasoline supplies. Pemex, the world’s most leveraged oil corporation, is getting a $3.5 billion capital injection from the government to help it pay down its $113 billion debt.
In May, Pemex announced that the refinery would be purchased for $596 million. That figure, however, only included Shell’s share of the debt of the joint-venture with Pemex’s trading arm PMI, in which both partners had a 50% stake, and not the refinery’s total debt.
Pemex isn’t compelled to publish details of its acquisitions because it isn’t publicly traded. The refinery’s debt, according to Pemex Chief Executive Officer Octavio Romero, is around $980 million, although it’s unclear whether Pemex plans to pay it off.
According to a document from the board meeting, the decision to buy the refinery was accepted by Pemex’s board of directors on Nov. 3, with the amounts redacted.
Pemex will have to pay Shell for assets such as inventories in addition to paying off debt to complete the sale, according to the filings.
The cost of inventory, comprising refinery inputs and products for sale, was a “additional amount” that “would be paid to the seller at closure and will be based on actual volumes and existing market pricing,” according to a Pemex statement at the time of the announcement.
According to one of the records, Deer Park has lost about $380 million in net losses this year.
With the acquisition depending heavily on federal funds, the additional costs will put even more strain on Pemex’s budget and Mexico’s coffers.
Pemex today has more debt than any other oil corporation in the world, totaling $113 billion, and it lacks a clear strategy to reverse long-term production decreases.
Pemex stated this week that it will get a $3.5 billion capital infusion from the government as part of a deal to pay down debt, as well as a series of bond buybacks and new issues to lower its borrowing costs.
Shell stated in a statement on Nov. 30 that the Deer Park refinery deal is expected to finalize in late 2021, while the Committee on Foreign Investment in the United States is still reviewing the sale.
What is the debt of Pemex?
Pemex is buried under $113 billion in debt, the most of any major oil producer, and is highly reliant on the federal government to continue paying bondholders. Pemex is struggling to reverse a decade of crude output declines and is highly reliant on the federal government to continue paying bondholders.
Why is Pemex owing money?
According to the statement, the reduction is due to a 50 basis point reduction in the difference between the interest rate Pemex pays to repay its debt and the government’s sovereign debt.
Pemex, one of the world’s most indebted oil firms, has struggled with falling crude production for 17 years and will lose its investment-grade rating in 2020.
President Andres Manuel Lopez Obrador, who is halfway through his six-year term, has sought to improve Pemex’s operations and finances while also canceling oil auctions open to private producers and tenders to select joint venture partners for Pemex, a common tool used to share risks and rewards in the international industry.
Lopez Obrador, a socialist who advocates a state-controlled energy industry, also wants to eliminate Pemex’s crude exports in the coming years and instead process the oil at home in order to make Mexico more energy self-sufficient.
Who pays for Pemex?
Pemex revenue taxes account for over a third of the tax revenue collected by the Mexican government. Pemex owes $42.5 billion in debt, which includes $24 billion in off-balance-sheet debt. Royalties and taxes account for more than 60% of the state-owned company’s revenue. Mexico sells crude oil but imports gasoline, which is more expensive. In 2012, the National Hydrocarbons Commission, which was established by the Mexican Congress in 2008 to improve regulatory control, upped its examination of Pemex.
Is Pemex a reputable company?
It is a Mexican government enterprise, hence it is heavily influenced by political and administrative changes in Mexico. In overall, it is a good organization when it comes to procurement.
Is Pemex going private?
Privatization of Pemex: Something to Keep an Eye On Pemex, Mexico’s government-controlled and owned oil monopoly, is resolved to work with the private sector to secure much-needed capital investment from the wellhead to the retail service station.
Pemex operates how many refineries?
Another issue for Mexico’s refineries is ensuring that the country can produce both heavy and light crude grades. The Dos Bocas refinery, according to Garca Bello, will be designed to process heavy crude oil, implying that it will not ease the country’s light crude shortfall. “Light crude is required by refineries in order to generate fuels such as gasoline,” he explained. “If Mexico’s light crude reserves are not increased, the country will continue to purchase light crude.”
Pemex may be able to learn from its Deer Park refinery in Houston, Texas, where it shares a 50 percent ownership with oil giant Shell, to fix the gasoline problem. The refinery’s capacity is 275,000 barrels per day, and it can process 100 million barrels of crude per year. Pemex will most certainly continue to rely on importing the correct crude grades to round out its slate in the medium term, even if its refining efficiencies improve. While Mexico can currently rely on US imports due to their low prices, a rise in US prices or a change in the exchange rate would have a substantial impact on local consumers.
Furthermore, the refinery issue cannot be resolved without addressing Mexico’s structural issues upstream. Even if the country develops its refining capacity, as demand for gasoline rises, it will become increasingly reliant on light crude imports. Imports of light crude for refineries and exports of heavy crude will differ until oil production rises. The federal government will have to deal with trade balance difficulties as a result of this. As a result, several industry participants have urged that the authorities focus more on upgrading current infrastructure than than adding new capacity. “Pemex’s six operational refineries are operating at less than half capacity,” Victor Ortelli, general director of engineering firm CH2M for Latin America, told OBG. “Allowing firms to focus on increasing production output at refineries that aren’t working at full capacity would be a more productive strategy.”
Given the challenges Pemex is anticipated to confront in increasing capacity at current facilities and managing the construction of a new refinery, many experts feel that private sector involvement will be critical for the government to achieve its objectives.
Is Pemex still operating as a monopoly?
For the previous eight decades, Pemex, Mexico’s state-owned petroleum business, has had a monopoly on petroleum, but its last monopolyretail gashas now been shattered.
Mid-2014, Mexican legislators decided to open the country’s energy industry to private, including international, companies, ending a 76-year monopoly, but Pemex managed to keep its gas station monopolyuntil now.