The dimension of Pemex’s debt
Although the federal government has made efforts to reduce Pemex’s financial debt, it remains a cause for concern for both the state-owned company and Mexico’s public finances due to its size.
With the debt of 106,056 million dollars at the end of 2023, they are equivalent to the construction of 6 “Olmeca” Dos Bocas refineries, which according to Pemex will require an investment of 16,816 million.
It also means the construction of 5 Maya trains, whose investment has been calculated at 20,000 million dollars and 24 AIFA airports, which cost around 4,300 million.
That is to say, with Pemex’s debt, an AIFA could be built in three of the country’s four states.
Fitch has mentioned that, historically, the government has imposed large taxes on Pemex that have left the company unable to maintain capital expenditure.
This, together with weaker operating indicators and delays in the construction and commissioning of the Dos Bocas refinery, has generated cash flow problems and an increase in its indebtedness.
It will continue to be a fiscal burden
Fitch Ratings analysts predict that Pemex will remain a burden on Mexico’s fiscal position and do not expect a change in the “will” of the next government of Claudia Sheinbaum to support the company.
According to the agency, since 2019 the Mexican State has provided Pemex with around 1% of GDP annually.
Thus, continued support for Pemex results in lower tax collection and is negatively impacting Mexico’s public finances.
Adriana Eraso, director of Latin American Corporate Finance at Fitch Ratings, has mentioned that although Pemex is one of the most indebted companies in the world, if not the most, this situation is not being remedied.
Everything that Pemex generates and that should be allocated to capital investments (Capex), to the business that is truly profitable for the company, which is Exploration and Production, is going to pay the interest on the debt.
