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LatAmOil MEXICO LatAmOil

Mexico’s Finance Ministry cuts

oil production forecast for Pemex

THE Mexican government has slashed its pro- level recorded since October 1979, in July. The
duction outlook for state-run Pemex, which is company also posted losses in the first and
struggling under a $107bn debt load and fallout second quarters of 2020, owing to a collapse in
from the coronavirus (COVID-19) pandemic. crude oil prices and the sharp depreciation of
The country’s Finance Ministry reduced its the Mexican peso.
preliminary estimate for oil output in 2021 to Pemex’s CFO Alberto Velazquez said at the
1.857mn barrels per day, according to Bloomb- time that the fallout from the pandemic was
erg, which viewed a draft version of next year’s “serious but temporary.” He also stressed that
budget proposal last week. In early April, the Mexico’s government was providing a substan-
ministry said it expected oil yields to average tial financial backstop for the company.
2.027mn bpd in 2021. Nevertheless, US-based Fitch Ratings said
The budget proposal also predicted that oil recently that Pemex was the “most vulnerable”
prices would average $42.10 per barrel next year. national oil company (NOC) in Latin America.
The ministry had said in April that its prelimi- It speculated that the firm might have trouble
nary forecast price was $30 per barrel. withstanding the shocks of this year without
The new production goal “takes into account more government support and higher revenue
the new demand and price environment, as well from its refining business. ™
as the renewed emphasis on efficiency in the
production and supply of fuels by Pemex,” the
document said, according to Bloomberg.
The ministry has expressed confidence that
Pemex will be able to sustain production at this
level. Some industry experts said, though, that
even the revised output figure might not be
realistic.
Marco Oviedo, the chief economist for Latin
America at Barclays, described the new target
as “optimistic” and said that Pemex was unlikely
to meet the lower target. “It seems that they [the
finance ministry] have not learned,” he told
Bloomberg.
Official data show that Pemex’s monthly oil
production sank to 1.595mn bpd, the lowest Pemex’s oil production hit a 40-year low in July (Photo: Pemex)

PERU
Fitch gives Peru LNG negative

outlook on weaker operations

US-BASED Fitch Ratings says its outlook for LNG’s ratings had found some support on the
Peru LNG (PLNG) is negative, owing to the strength of its gas buyer, Royal Dutch Shell (UK/
consortium’s weaker operational performance, Netherlands). “Fitch estimates that PLNG’s
which stems from a decline in world prices for production represents 3-5% of Shell’s global
natural gas. integrated gas sales. In addition, Shell is PLNG’s
“Fitch believes lower international gas prices second largest shareholder,” it explained.
should result in a slower deleverage trajectory PLNG is controlled by US-based Hunt Oil
for Peru LNG than initially expected for the next with a 50% share, Shell with 20%, SK Group
few years,” the firm said in a statement. (South Korea) with 20% and Marubeni (Japan)
The agency also stressed, though, that Peru with the remaining 10%.

P12 www. NEWSBASE .com Week 37 17•September•2020