Page 6 - LatAmOil Week 09 2023

LatAmOil MEXICO LatAmOil

Pemex reportedly in talks with Goldman

Sachs, JPMorgan Chase on $1bn financing

MEXICO’S national oil company (NOC) Pemex President Andres Manuel Lopez Obrador
is reportedly in negotiations with two US-based has confirmed that if Pemex is unable to obtain
investment banks, Goldman Sachs Group and the funding it needs to pay off its debt through
JPMorgan Chase, over financing deals worth a its own means, the Mexican Finance Ministry is
combined $1bn. prepared to assist the company. The president
Sources familiar with the subject told has also warned, however, that the NOC will
Bloomberg last week that Pemex was in talks be required to first cover its debt amortisations
with Goldman Sachs on a deal that would be to the best of its ability as Mexico’s government
backed by its crude oil sales, while the discus- continues to face budgetary restrictions. Since
sions with JPMorgan concerned a deal backed 2019, the Finance Ministry has provided Pemex
by gasoline sales in Mexico. These negotiations with $45bn worth of financing via administra-
could raise at least $1bn in funding for the NOC, tive measures such as extra capitalisation and
said the sources, who spoke on condition of tax breaks.
anonymity.
As of press time, neither the banks nor The NOC’s managers have expressed opti-
Pemex had confirmed the sources’ report. Mex- mism on multiple occasions, saying that rising
ico’s Finance Ministry has also declined to com- oil prices could help improve finances. How-
ment on the matter. ever, the company’s fiscal position has been
The new financing plan makes the magni- negatively affected by the fall in crude produc-
tude of the Mexican company’s cash flow prob- tion that began more than a decade and a half
lem clear. Pemex appears to be seeking funding ago. This long-term trend remained evident in
from Goldman Sachs and JPMorgan in order third quarter of 2022, when Pemex reported a
to boost its bank balance, not just because it is loss even as many international oil companies
struggling to pay off its existing debts, but also (IOCs) recorded large profits. ™
because it is working to recover from revenue
losses stemming from lower production.
Currently, the company is carrying $105bn in
debt, making it the most indebted oil company
in the world. It stands to add another $8bn in
outstanding debt to its portfolio this year, and it
issued $2bn worth of 10-year bonds in January.
The company has acknowledged its debt
problem and began exploring solutions near the
end of last year to reduce its mounting financial
obligations. It did discuss one potential option
with Goldman Sachs and HSBC Holdings
involving financing options related to green-
house gas (GHG) emissions, but as of press time,
it had not decided on any solutions. Pemex is the most indebted oil company in the world (Photo: Twitter/@Pemex)

NFE expects first exports from FLNG

units offshore Altamira this summer

US-BASED New Fortress Energy (NFE) In a statement, the company said that the
revealed on February 28 that it expects a floating construction of the first of two “Fast LNG”
LNG (FLNG) unit slated for installation off the FLNG vessels was about 80% finished. The two
coast of Altamira, Mexico to begin production units will have a production capacity of 1.4mn
in July. tonnes per year (tpy), it noted.

P6 www. NEWSBASE .com Week 09 01•March•2023