Page 6 - LatAmOil Week 49 2021

LatAmOil MEXICO LatAmOil

Mexican government provides

Pemex with $3.5bn in extra funding

MEXICO’S Ministry of Finance and Public of energy reforms under the last presidential
Credit announced on December 6 that it was administration in 2013-2014. (The president
granting $3.5bn worth of additional funding to has made clear that he believes state-owned
the national oil company (NOC) Pemex. companies should dominate the fuel and energy
In a statement, the ministry said it was taking sector.)
this step in a bid to improve Pemex’s financial Even so, the NOC will still face serious prob-
standing. Pemex is slated to use the extra funds lems, including a long-term decline in crude oil
to pay off some of its foreign debts and buy back production and the oil-refining sector’s inability
some of its securities, it explained. to operate at full capacity. It will also have to bear
The Ministry of Finance and Public Credit the cost of certain initiatives favoured by Lopez
is offering this cash injection to support the Obrador, such as the purchase of a 50.01% stake
NOC’s adoption of a new five-year business plan in the Deer Park refinery in Texas from an affil-
backed by Mexican President Andres Manuel iate of Shell (UK).
Lopez Obrador. Within the framework of this Pemex has reported the purchase price of the
plan, Pemex will begin selling a new type of US stake at $596mn, but Bloomberg reported ear-
dollar-denominated bond that will be known as lier this week that it had seen documents show-
“New Money Securities.” ing that the total cost may come to about $1.6bn.
These bonds will consist of the NOC’s unse- The NOC will use around $1.6bn, including cap-
cured obligations, guaranteed jointly by three italisation from Mexico’s National Infrastruc-
Pemex subsidiaries, together with their respec- ture Fund and a bridge loan from commercial
tive successors and assignees. However, they will banking institutions, to buy the stake and settle
not include any outstanding Pemex securities more than $1bn of the Deer Park plant’s debts,
that are due to mature in 2022 or 2023, since the news agency said. ™
the Mexican government has already allocated
budget funds to cover payments to holders of
these bonds.
The additional funds are likely to take some
of the immediate pressure off Pemex, which is
the world’s most indebted oil company. As of the
end of the third quarter of 2021, the NOC’s debt
portfolio was reported to amount to around
$113bn. However, this relief will come at a price,
as Lopez Obrador is likely to insist that his gov-
ernment be given tighter control over Pemex in
exchange for its support.
In turn, closer ties with the state may offer
Pemex a certain amount of respite from the
competition it has faced since the introduction Pemex is the world’s most indebted oil company (File Photo)

TRINIDAD AND TOBAGO
Trinidad and Tobago offers 17 blocks

in new deepwater bidding round

TRINIDAD and Tobago’s Ministry of Energy 2021 Deep Water Competitive Bid Round in a
and Energy Industries has begun accepting bids statement on December 3. It said it would accept
for 17 new deepwater blocks. offers until June 2, 2022, and then announce the
The ministry announced the start of the winners three months later.

P6 www. NEWSBASE .com Week 49 09•December•2021