For analysts, the environment of high oil prices – which have remained above $100 per barrel, but have already fallen in recent months as supply and demand have stabilized – was the perfect time to that the company will bet on the exploration and production of oil, will focus on exports and will leave – at least for now – its intention to increase its refining levels. Pemex partly renounced the presidential commitment to stop exporting crude oil to favor the domestic market, but it failed to increase its oil production and continued refining, despite losing for every barrel it converted into fuel, at the same time that it resented the high costs of gasoline imports.
The state-owned company has closed with a net loss for the past nine years, according to data compiled by Bloomberg. This year could end that streak, but the benefit could have been greater had it opted for another strategy and had more capital to invest in its most profitable segments, analysts have said.
The company’s losses have increased since 2013, when a sharp drop in the price of oil aggravated its finances, and it has not been able to recover until now. With what has elapsed so far this year, it already adds around 9.6 billion dollars in profits, a much more encouraging figure than the record number of losses of 23.8 billion dollars that it recorded in 2020. Pemex could have had better results if it had forgotten for a moment the refining business, which has suffered more losses than the rest of the business segments.
While the rest of the refiners posted record margins – which have already fallen in the last quarter – Pemex lost 7 dollars for each barrel of fuel it produced in the last three months. The explanation is based on the low efficiency of the six refineries of the state. The giant ExxonMobil reported a record refining margin in the same period. This, added to the high oil prices, led the American company to report record profits of almost 20,000 million dollars in just one quarter.
Saudi Aramco, the world’s largest oil company, has broken its record for cash flow this year and in the second quarter hit its record for profit. The Saudi oil company has based these results on three main actions: selling more oil, taking advantage of the best prices and achieving high refining margins, as explained in its financial statements. The Middle Eastern giant began years ago to diversify its income and that has already given results: it gave more importance to the renewable business and started in other segments such as hydrogen.
The company says it is growing its oil and gas production capacity while advancing its goal of zero emissions and diversifying its portfolio. It says that its business strategy is being based on an “orderly energy transition”. Saudi Aramco does not see oil demand falling for at least the next decade.
The Brazilian state Petrobras, which has a past similar to Pemex, with continuous losses from 2013 to 2017 and operational decisions that until recently were based on political argumentshas managed in the first nine months of the year to write down a record profit within its operation, with more than 28,000 million dollars. It already exceeds the profit of 19.800 million dollars that it registered in all of last year.
The Brazilian giant’s strategy changed a couple of years ago, when it decided to focus on oil exploration and production and sell other secondary businesses, such as refining, storage and transportation of hydrocarbons. It also opted for a structure that went beyond the political moment, especially in terms of the appointment of its managers.
The international peers of the Mexican state-owned company also explain in their financial reports that their profits have increased due to the high prices of natural gas and the petrochemical business. The continuous increase in the price of fuel – the most used worldwide for power generation – has brought economic benefits to oil companies that have maintained a constant production of hydrocarbons in recent years.
Pemex has begun to prioritize this business, with projects such as the Lakach deepwater field. But having put it aside for years – because it wasn’t profitable – hasn’t allowed it to seize the moment. On November 21, Pemex signed a contract with the American company New Fortress Energy to resume gas extraction works in the Lakach deepwater non-associated gas field, which includes an investment of 1.5 billion dollars.
The dramatic increases in the price of natural gas have had as their main point of origin the war between Russia and Ukraine. The first, one of the main producers of the molecule, has stopped supplying the fuel to a large part of the European community. Fear of a shortage has increased the price in international markets.
The world’s oil and gas giants have reported extraordinary profits in recent months and this has sparked a series of discontents in the world, while electricity bills rise and the cost of filling the gasoline tanks of the cars does not subside. The extraordinary taxes on these types of companies have already begun to appear at the same time that analysts already anticipate a drop in the income of these companies.