Page 6 - LatAmOil Week 05 2023

LatAmOil MEXICO LatAmOil

AMLO says his government will continue

helping Pemex cover debt payments

MEXICO’S President Andres Manuel Lopez information later, he added.
Obrador indicated on January 26 that his gov- This will not be the first time that the oil
ernment had responded positively to requests major has accepted assistance from the Mexi-
from the national oil company (NOC) Pemex can government. The company has received tax
for assistance in covering financial obligations breaks and injections of capital from the gov-
to holders of its securities. ernment in the past, and it also received several
Speaking to journalists, he said Mexico City tranches of funding in early 2022 to help cover
had formulated a plan to ensure that Pemex payments to bondholders.
could pay its debt amortisations in 2023. He The president’s pledge of assistance caused
added that the government fully supports the the price of several types of Pemex securities
state-run oil company and stressed that all of to rise. For example, on January 27, a company
the NOC’s payments to date had been made on bond maturing in 2048 gained $0.015 cents to
time. reach $0.672, and another maturing in 2046
Pemex’s next round of payments is due at the advanced by $0.025 cents to reach $0.653.
end of the first quarter of 2023 and will amount
to $5.5-6.0bn, according to the company’s CEO, Details still unclear
Octavio Romero Oropeza. The NOC currently AS of press time, details of the company’s plans
has a total debt load of about $105bn, making for paying debt amortisations were still com-
it the most indebted oil company in the world. ing to light. The NOC is due to pay out a total
According to Lopez Obrador, Mexico’s gov- of $10bn to investors this year, and Bloomberg
ernment is committed to helping Pemex meet reported last week that Pemex might issue $2bn
these and other bond repayments deadlines this worth of new bonds in order to cover this sum.
year. This aid will take the form of reductions in The Finance Ministry, meanwhile, has not
tax rates, as well as other measures, he said. yet disclosed its plans. Deputy Finance Minis-
“They have, I repeat, a plan to cover debts ter Gabriel Yorio said at a press conference on
for this year. Helping with the transfer of Pemex January 30 that Mexico City would use a variety
debts to sovereign debt – Finance Ministry of methods to support the company in 2023 and
debt – is another important practice,” Lopez 2024. He stated, though, that the government
Obrador stated. This is an action that will help was not contemplating any further reductions
the to reduce the NOC’s borrowing costs, he in the profit-sharing tax, which was cut from
explained. 54% to 40% in 2022.
When pressed for details, the president said “There’s no single way to support Pemex. We
the government had not yet determined exactly usually use a mix of financial and fiscal tools,”
how much additional financial support Pemex Yorio said, according to a report from Bloomb-
would receive. He also stated that he expected erg. He also reiterated that Mexico City would
the final figure to be calculated in line with the continue to provide the NOC with support but
limits that Mexico’s legislature set for the 2023 declined to elaborate, stating: “That’s all the
budget. The Finance Ministry will disclose more information I can give you at this time.” ™

The president pledged support to Pemex at a press conference on January 26 (Photo: LopezObrador.org.mx)

P6 www. NEWSBASE .com Week 05 01•February•2023