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Pemex secures 2Q profit, while debt rebounds; to receive capital from gov.

Pemex

Pemex, which stands for Petroleos Mexicanos, the Mexican state-owned oil company reported this Wednesday its quarterly financial results; the company reported a net profit of $722.5 million for the second quarter; recovering from a loss in the same period last year, mainly due to higher crude prices and production.

Firstly, the company confirmed that the $14,4 billion pesos profit was mainly driven by boosted international sales; which doubled from a year earlier due to higher crude prices and a slight rise in oil volumes exported.

Secondly, despite the recovery, the financial debt of the company rose from the 1Q of 2021; reaching $115.1 billion at the end of the April-to-June period; due to the use of short-term financing. Pemex also remarked that it won’t resort to the bond markets for refinancing; as it plans to receive capital injections from the Mexican government through the end of the year.

Thirdly, the company reported that it ended the 2Q period with $175 million and $4,5 billion pesos in available credit lines. About the surprising recovery, Chief Financial Officer, Alberto Velasquez, said, quoted by Reuters. “With the trend of the results we are achieving; and also, with the support of the federal government, there is no risk to meet our financial commitments.”

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Pemex oil mix more than doubled its price during last year

Moreover, this Tuesday the firm Moody’s downgraded Pemex’s rating one step further; sending it deeper into junk territory. The downgrading came as the company had poor performance in its refining operations. Pemex CEO, Octavio Romero said he really disliked the move.

In addition, as Reuters reports, Pemex processed around 5,4% more crude during 2Q, to an average of 666,000 bpd. It plans to keep boosting those numbers up to 831,000 bpd for next month, and plans to reach the million bpd in 2022.

Furthermore, Mexican president, Andres Manuel Lopez Obrador, has mandated that the company peaks its refining; in order to decrease the expensive oil imports and replace them with national production. However, Pemex is still struggling with its refining business, as it is showing very tight margins.

Finally, the company’s total income for the 2Q was for $347,44 billion pesos, around $17,42 billion dollars. That is a substantial increase from 2020’s same period, when the company reported $181,7 billion pesos of income. During such period, Mexican oil mix more than doubled its price ; going from $24,40 per barrel during 2Q 2020, to $63,81 for 2Q 2021.

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