Page 11 - LatAmOil Week 50 2020

LatAmOil MEXICO LatAmOil

Mexico considers proposals to

make Pemex’s tax burden lighter

THE Mexican government is considering pro- to 58% earlier this year. Rates could sink again to
posals to lighten the tax burden imposed on 54% in 2021, he said.
Pemex, the national oil company (NOC). Mexico’s current president, Andres Manuel
According to Mexico’s Deputy Finance Lopez Obrador, has described efforts to improve
Minister Gabriel Yorio, tax cuts would bring Pemex’s finances as a top priority. For its part,
the burden on Pemex, which is Mexico’s largest the company is trying to maximise crude pro-
company and taxpayer, down to a level closer duction from its core producing areas in order to
to that of ordinary corporations. “We’ll have to pay down debt and reverse a long-term decline
see how much of this our public finances can in output. In March, it said it hoped to trim con-
absorb,” he told Reuters in an interview. tract costs by around $217mn and administra-
So far, he added, Mexican authorities have tive costs by $27mn this year. These measures
made no decisions on this front. He argued, did not save the firm from being stripped of its
though, that the current tax regime ought to be investment grade credit rating by several ratings
revised in stages. agencies in April. ™
“Changing the tax burden is a structural
change that Pemex needs, but we have to do it
gradually,” Yorio said. He suggested that tax rates
could be reduced between 2021 and 2024 so that
Pemex “can start paying taxes like other corpo-
rations in Mexico.”
The call for lower tax rates is not new, as pre-
vious Mexican administrations have argued that
the company bears an excessive burden. Yorio
agreed, telling Reuters last week that the NOC
had “two great structural problems with its cash
flow: its debt burden and its tax burden.”
He also noted that the firm has benefited
from various forms of financial support, includ-
ing the government’s decision to cut the shared
utility tax, which represents the company’s larg-
est single payment to the government, from 65% The NOC is Mexico’s largest taxpayer (Photo: Pemex)

Eni considers drilling two

new wells offshore Mexico

THE Italian oil and gas major Eni is looking to licence area last week.
sink up to two new oil and gas exploration wells The modified plan provides for the Italian
at Cuenca Salina, a deepwater block in the Sur- company to invest nearly $132mn in the Sureste
este Basin offshore Mexico. Basin by 2023. It also envisions the drilling of
Eni struck oil at the Saaskem structure in additional wells at four new Sureste prospects –
Cuenca Salina, one of the eight blocks it operates Celestun, Holbox, Mazunte and Sayulita. Rod-
in the Mexican section of the Gulf of Mexico, last rigo Hernandez, a technical advisor for CNH,
year. It is now looking to drill additional wells in noted last week that Eni hoped the Mazunte
order to further the appraisal of the structure, project would help open up a separate reservoir
which lies within the south-western part of in the Oligocene layer.
Block 10. As such, Mexico’s National Hydrocar- Results from early drilling programmes will
bons Commission (CNH) gave the green light determine the pace and direction of future oper-
to modifications to the exploration plan for the ations in the Sureste Basin, he added.

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