The president of Mexico, Andrés Manuel López Obrador, last week addressed the situation of the national oil company, Petróleos Mexicanos (Pemex).
In general terms, he mentioned two aspects that are highly revealing of how this is, in effect, the most important public company in our country.
First, he said that Pemex’s debt is sovereign debt, that in fact his government has given it such status. The second thing is that his government’s support will continue because Pemex is the most important company in the country and one of the most important in the world. Let’s go by parts.
Pemex debt is sovereign debt, there was no other option
In reality, what the president did is recognize what is clearly evident: at the beginning of the six-year term, Pemex’s external debt was 110 billion dollars, it was classified as the most indebted oil company on the planet. Four years later, Pemex’s situation has not changed substantially, let’s go to the official source to prove it.
Just on October 22, 2022, the general director of Pemex, Octavio Romero Oropeza, explained to the Chamber of Deputies that, at the end of the year, the estimated balance of Pemex’s debt will amount to 105 thousand 452 million dollars.
In other words, Pemex has recorded a debt reduction of 5 billion dollars in the four years of this government. At this rate, and assuming that Pemex does not acquire more debt, it will take 84 years to finish paying off the enormous debt it has.
In fact, Pemex’s debt is sovereign debt because the guarantor of Pemex, its owner and main shareholder is the federal government and, as we know, the Federation represents our entire country. Thus, recognizing that Pemex’s debt is sovereign debt is nothing new, although the reality is still stark.
In reality, the 105 billion dollars of debt that the oil company has is the debt of all of us, of the country. Mexico could not afford to let the company go bankrupt, it would be unthinkable even for a government like the current onewhose supposed approach is to privilege social spending above all things.
Is Pemex one of the most important oil companies in the world?
Yes, as long as the context in which we are speaking is that of 20 years ago; At that time, our oil company was indeed one of the most important on the planet, came to be considered among the sites seven or eightdepending on the source.
Pemex produced around 3.2 million barrels of oil per day 20 years ago, while its debt was fully manageable, structured in the long term. In addition, the oil company had one of the largest oil reserves on the planet.
What happened? Did the goose that laid the golden eggs die? As the then president Enrique Peña Nieto once anticipated when referring to the deteriorating situation that since then began to be reflected in the company.
Today Pemex is no longer considered one of the main companies on the planet, it is not in the top 10, or even in the top 20 of these companies.
Pemex will be 85 years old on June 7 (although they will be celebrated on March 18 on the occasion of the anniversary of the oil expropriation; but its age says it all, and not because something or someone who is 85 years old is necessarily old or inefficient. Without However, Pemex is a rheumatic elephant, and excessively indebted.
Pemex does not appear in any global ranking as one of the most important oil companies in the world, something that official nationalism insists on wanting to highlight, it is not so.
The oil company remains the most indebted on the planet, this year it will produce an average of 1.7 million barrels of oil per day, practically half of what it produced two decades ago; With little or no investment, with a market practically closed to foreign investment, as it had been before the 2013 energy reform, this reform is said to have been a setback for Pemex; The truth is that neither that nor the current one have worked, Pemex continues immersed in inefficiency and low profitability and far, far away from the first places among the most important oil companies on the planet.
Definitely not, Pemex is not one of the most important oil companies in the world, it is an irrefutable fact, everything else is nothing more than a simple speech.
Did the goose that laid the golden eggs die?
It is difficult to affirm, but what we can point out is that, at least, the goose that lays the golden eggs has been in intensive care for a long time.
Petróleos Mexicanos registered losses of two thousand 600 million dollars between July and September of last year, after registering two consecutive quarters of profits.
Pemex’s negative performance was due to the drop in sales, the increase in their costs, exchange losses due to the depreciation of the peso against the dollaras well as the increase in tax payments, according to the company’s own financial report.
Despite the fact that in the third quarter losses of 52 thousand 033 million pesos were reported, they are still below those registered in the same period of 2021, which were 77 thousand 244 million pesos.
But the history of Pemex throughout the six-year term is the same, a period of intense losses, a company that day by day deepens its deterioration and that the only thing that keeps it standing is, effectively, the billions of pesos that the government contributes to it each year. In fact, Pemex has been technically bankrupt for a long time.
In conclusion, although there is still some time left, next March 18, when another anniversary of the Oil Expropriation and the birth of the most important public company in the country will be celebrated, the usual will dominate: the discourse, seasoned with the figures themselves and the overwhelming optimism in the sense that Pemex will succeed because it has the essence of the Mexican people, plus a series of things that are always assured.
The truth is that Pemex has long since ceased to be relevant in the global oil concert, but no government of any color will dare to acknowledge its bankruptcy.
Meanwhile, Pemex will continue to be a drag on national finances and the pockets of Mexicans, paying off a debt that seems unpayable, paying for its inefficiency and the mistakes of the past and present. Pemex is not one of the most important oil companies in the world, it stopped being one a long time ago.
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