Page 6 - LatAmOil Week 37 2021

LatAmOil MEXICO LatAmOil

Mexico to raise Pemex’s budget to $32bn

MEXICAN President Andres Manuel Lopez indebted oil company, with a debt portfolio of
Obrador has offered to raise national oil com- more than $115bn. It is also trying to reverse a
pany (NOC) Pemex’s budget for next year to long-term decline in production but is likely to
about $32bn in the hope of boosting crude have difficulty doing so, especially since several
production. prominent international ratings agencies have
The company’s proposed budget for 2022 stripped it of its investment-grade credit ratings
would be 17% above the 2021 figure and would over the last two years.
include operational spending, according to a Mexico’s Finance Ministry expects Pemex’s
Bloomberg report. It earmarks more than half of oil production to hit 1.826mn barrels per day
the total $32bn, or around $18bn, for investment (bpd) this year, up 4.2% from last year. The com-
in exploration and production, a 26% year-on- pany still accounts for the vast majority of the
year increase, the news agency noted. country’s crude output, even after the passage
Meanwhile, the Mexican government is tak- of landmark energy reforms in 2013-2014 that
ing other measures to improve the NOC’s finan- put an end to its long-standing monopoly on the
cial standing. Specifically, Bloomberg reported, hydrocarbon industry. ™
it has said that Pemex’s profit-sharing duty will
fall to 40% next year, down from 54% this year,
and has also kicked off the process of refinancing
the company’s debt.
Lopez Obrador has said that reviving Pemex,
which is Mexico’s largest company and also its
largest taxpayer, is a major priority. Past govern-
ments have argued that the company faces an
excessive tax burden, and the current adminis-
tration is now considering whether to lighten its
load by bringing its tax rates closer to those paid
by ordinary corporations.
The government has already taken a step in
this direction. Last year, it cut the shared util-
ity tax, which constitutes Pemex’s largest single
payment to the government, from 65% to 58%.
The NOC is currently the world’s most Pemex is expected to produce 1.826mn bpd of oil this year (Image: Pemex)

PANAMA
AES expands LNG footprint in Panama

US-BASED AES has bought out its minority commitment to Panama and represents a new
partner in AES Colón, the operator of a natural milestone in the execution of our regional LNG
gas complex on Telfers Island, near the Atlantic strategy to deliver cleaner, reliable and efficient
end of the Panama Canal. energy to our clients,” said Juan Ignacio Rubiolo,
AES announced the acquisition in a state- the president of AES’ Mexico, Central America
ment dated September 14, saying that it had and the Caribbean Strategic Business Unit. “This
acquired a 49.9% stake in the complex from acquisition will contribute to maximising the
Inversiones Bahia, a private Panamanian firm value of our regional LNG business through the
involved in asset management and capital development of important synergies and flexi-
investment. The deal brings AES’ holdings in bility across our portfolio.”
AES Colón up from 50.1% to 100%, the state- Gustavo Pimenta, AES’ executive vice-pres-
ment said. ident and CFO, spoke similarly. “We are glad
As of press time, the company had not to continue executing on our LNG strategy
revealed the value of the transaction. AES rep- in Central America and the Caribbean. This
resentatives noted, though, that the deal was acquisition will position AES to incorporate
in line with the company’s efforts to expand its new strategic partners into these LNG assets
LNG-related business in the region. and continue unlocking the portfolio’s value,”
“This transaction reaffirms AES’ he commented.

P6 www. NEWSBASE .com Week 37 16•September•2021