• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 13 hours Solving The Space Problem For America’s Solar Industry
  • 1 hour Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 20 hours Investment in renewables tanking
  • 13 hours How Far Have We Really Gotten With Alternative Energy
  • 5 days If hydrogen is the answer, you're asking the wrong question
  • 5 days "Mexico Plans to Become an Export Hub With US-Drilled Natural Gas" - Bloomberg - (See image)

Mexico Slashes Pemex Debt By $3.2 Billion

Mexico has reduced the debt burned of state-owned oil major Pemex by as much as $3.2 billion through a refinancing operation, Bloomberg reports, citing a statement by the Mexican finance ministry.

The operation involved swapping debt that was close to expiring with a new bond that will mature in 10 years. The government also refinanced some medium-term debt taking advantage of low refinancing costs.

This is not the first time the government has used debt swap and refinancing tools in its efforts to reduce the debt burden of the state oil company, which is the world's most indebted one with its debt pile at $113 billion.

In 2020, Pemex issued a $1.5-billion bond to refinance its existing debt. Then in December last year, the government gave Pemex a capital injection of $3.5 billion. With the latest debt refinancing move, the company's "financial pressure" will be reduced by some $10.5 billion between 2024 and 2030, according to the finance ministry.

In addition to debt refinancings and direct capital injections, the government has also provided the energy major with tax breaks to help it get back on its feet. Since the Lopez Obrador administration came into power, the state has reduced the amount of taxes the company owes it three times, from 64 percent to 40 percent.

The Mexican government has been moving ahead with a comprehensive revamp of the country's energy market aimed to virtually undo all the reforms implemented by the previous administration and re-establish state-owned companies as the dominant players in the field. López Obrador also strongly favors fossil fuels and a key role for Pemex in the market.

Pemex, however, has been struggling to reverse a long-term decline in oil production, especially after the Lopez Obrador government effectively shut out foreign oil companies from Mexico's oil wealth.

By Charles Kennedy for Oilprice.com


More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News