(Recasts lead to include downwardly revised crude projection
By David Alire Garcia
MEXICO CITY, July 25 State-owned Mexican oil
company Pemex reported a wider second-quarter loss on
Friday and said average crude oil output this year will fall to
its lowest level in more than two decades.
Losses for the quarter totaled 52.226 billion pesos ($4.02
billion), led by losses at the company's refining unit, compared
with a loss of 49 billion pesos in the year-earlier period.
The company said the losses were caused by higher sales
costs, a decline in asset values and a bigger tax bill.
Revenue rose 4.1 percent to 409 billion pesos, mainly
because of higher domestic sales and exports, compared with
revenue of 393 billion pesos in the second quarter last year.
Sales costs jumped 13.2 percent, or by 24.4 billion pesos,
as a result of preexisting obligations and higher production
costs, the company said.
Pemex also reported an 8.7 billion-peso decline in the value
of its Burgos natural gas asset in northern Mexico.
"Inside and outside the company, the environment has grown
more complex," Pemex's chief financial officer, Mario
Beauregard, said in a call with analysts.
Gustavo Hernandez, Pemex's exploration and production chief,
said on the call that the company now expects crude output this
year to average 2.441 million barrels per day (bpd), down 3
percent compared with the previous estimate of 2.520 million
The new estimate would mark the lowest annual average crude
output in over two decades, according to Energy Ministry data.
Hernandez said the downward revision is due to a
steeper-than-expected decline at several oil fields.
The company's crude output during the second quarter
averaged 2.468 million barrels per day, down nearly 2 percent
from the year-earlier period. The drop was led by an almost 6
percent drop in heavy crude output, as well as a slight drop in
production of extra light crude.
Since hitting peak production of 3.38 million bpd in 2004,
Mexican crude output slid to 2.52 million bpd last year.
Mexico's government relies on oil revenues to fund about a third
of the federal budget.
"In the short and medium term, Pemex will continue to be the
most important fiscal contributor to the Mexican government,"
He added that he expects the government's energy reforms to
gradually lessen taxes levied on Pemex. The company's tax burden
during the second quarter rose about 5 percent to nearly 218
Late last year, Mexico's Congress passed landmark energy
reform legislation that ended Pemex's 75-year monopoly on oil
production and that aims to lure significant new streams of
private investment via new contracts to boost output.
Mexico is the world's 10th-biggest crude producer and the
third-largest oil exporter to the United States.
(Reporting by David Alire Garcia; Editing by Grant McCool and