Higher oil prices secured Mexico’s Pemex a quarterly profit; debt swelled

(Reuters) – Mexico’s state oil company Petroleos Mexicanos (Pemex) on Wednesday reported net profit of $722.5 million in the second quarter, swinging from a loss in the same period last year thanks to higher crude prices and production.

The company said the 14.4-billion-pesos profit was due to higher income from international sales, which doubled from a year earlier due to higher crude prices and a slight rise in oil volumes exported.

Pemex’s financial debt rose from the first quarter of the year, reaching $115.1 billion at the end of the April-to-June period due to the use of short-term financing.

But the company also said it finished the quarter with $175 million and 4,500 million pesos in available credit lines.

On Tuesday, Moody’s downgraded Pemex debt one notch, sending it deeper into junk territory mainly due to the poor performance of refining operations. Pemex chief executive Octavio Romero said he disagreed with the move.

The company, whose refineries processed 5.4% more crude in the second quarter for an average of 666,000 bpd, plans to keep boosting oil processing to 831,000 bpd next month, and 1 million bpd in 2022.

Mexico President Andres Manuel Lopez Obrador has mandated more domestic refining for the company so a portion of expensive fuel imports can be replaced, but Pemex still struggles to make profits from refining, with most refineries showing very small margins.

In the second quarter, the extra volume of crude Pemex processed did not result in higher fuel output for the domestic market. The average of fuel produced was 659,000 bpd, slightly below the volume of the same period of 2020.

The firm’s total income in the second quarter was 347.44 billion pesos ($17.42 billion), up from 181.7 billion pesos in the year-earlier period. The average price of Mexico’s exportable oil mix more than doubled to $63.81 per barrel from $24.40 per barrel in the second quarter last year.

The second quarter net profit came after Pemex reported a loss in the same period last year of 44.33 billion pesos, or $1.9 billion at the exchange rate of the time. The company also had a loss, of $1.8 billion, in the first quarter this year mainly due to higher costs for imports.

Pemex’s production of crude and condensate rose to 1.736 million barrels per day (bpd), a 3.8% increase from the second quarter a year earlier.

($1 = 19.9470 pesos at end-June)

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Powered by WordPress.com.

Up ↑

%d bloggers like this: