MEXICO CITY (Reuters) - Mexico’s government will likely announce “significant” new measures to help Pemex later this month, Finance Minister Carlos Urzua said on Friday, as the state oil company tries to avert a threatened credit rating downgrade to “junk.”
Urzua did not offer details on the additional measures.
Last month the government announced it would inject some $3.9 billion into Pemex, an amount that includes some $200 million in fresh tax reductions. But ratings agency S&P took a dim view of the bailout and said it was not enough.
President Andres Manuel Lopez Obrador is under growing pressure to dispel doubts that Pemex can successfully manage more than $16 billion of debt payments due by the end of next year as well as halt the company’s extended oil output slide.
To date, solutions favored by Lopez Obrador, a leftist populist who ran on a promise of strengthening the Mexican oil giant, focus on rooting out corruption from within the company while directing more public financing its way.
“We have other measures that are more significant that will help Pemex,” Urzua said, adding that an announcement was likely later in March.
Petroleos Mexicanos, as Pemex is formally known, is the most indebted national oil company in Latin American with financial debt totaling about $106 billion while its unfunded pension liabilities add up to nearly $70 billion.
Urzua on Friday emphasized that mounting debt problems at Pemex must be addressed because “sooner or later” they will damage the country’s sovereign debt.
The finance minister also touted savings from a major offensive against fuel theft rackets launched shortly after Lopez Obrador took office in December.
Gasoline theft, he said, has declined from more than 125,000 barrels per day (bpd) before the clampdown to between 7,000 and 8,000 bpd.
“This has given the company an extra funding stream of around 3 billion to 3.5 billion pesos per month,” said Urzua, which at the current exchange rate works out to monthly savings of between $154 million and $180 million.
The firm’s crude production has slid for 14 consecutive years as it has been unable to replace output from its aging fields with new discoveries.
Lopez Obrador has been sharply critical of a landmark 2013 oil reform that ended Pemex’s decades-long monopoly and permitted private oil majors to operate fields on their own for the first time since the industry was nationalized in 1938.
His senior aides have at times floated the possibility that oil auctions, suspended by Lopez Obrador, could be renewed once existing contracts show results.
While tenders to pick joint venture partners for Pemex remain scheduled for October and could allow development of several onshore areas using mostly private capital, Lopez Obrador has been cool to equity partnerships that involve ceding control over project operations to would-be private partners.
Reporting by Anthony Esposito; Writing by David Alire Garcia; editing by Frank Jack Daniel and Tom Brown