In response to Fitch Group’s & Moody’s downgrade of Pemex’s credit rating to one notch above junk, Mexico’s government recently pledged a $3.9-billion capital injection and $200 million in tax relief, according to international media reports. This bailout package and the six-year business plan aims to help reverse Pemex’s credit downgrade, help control its USD $106 billion debt, boost cash flow, and increase crude production.
Pemex’s exploration budget in 2019 will be doubled to $2.5 billion. This could enable Pemex to fast-track development of 20 new fields around the southern rim of the Gulf of Mexico and raise output to 1.8 million barrels a day by year-end. To raise oil production to 2.6 million barrels a day by the end of 2024, the exploration budget will increase by 10 percent in coming years.
To reduce Mexico’s reliance on expensive light oil imports from the United States, Pemex’s six existing refineries will be modernized and it plans to build an $8-billion refinery at Dos Bocas in the state of Tabasco on the Gulf of Mexico coast. The refinery will be Mexico’s largest with a crude processing capacity of 340,000 barrels a day. Read more