Pemex registers in 2020 the “worst crisis in its history” with record losses caused by the pandemic

An oil platform of Pemex.AP

The coronavirus crisis has sunk Pemex's finances in 2020. Last year the state oil company registered a historical loss of 480,966 million pesos (22,995 million dollars), which represents an increase of 38% compared to 2019 when the losses of the state oil company were 347,911 million pesos (16,600 million dollars at today's exchange rate).

In a conference with investors, the director of the oil company, Octavio Romero, acknowledged that the pandemic has caused great havoc in the world economy and in the company in particular.

"Pemex was not oblivious to this world situation and faced the worst crisis in its history," he acknowledged in a conference with investors this Friday.

Although the state oil company reported a net profit of 124,210 million pesos during the fourth quarter of 2020, the improvement in the last section of the year did not manage to mitigate the debacle caused by the coronavirus crisis during the rest of the year.

In its annual balance, the revenues of the state company were reduced by 32% when accounting for only 953,729 million pesos at the end of 2020.

The oil company's sales were affected by the fall in national demand of 37% for fuels such as gasoline, diesel and jet fuel for aircraft.

The state oil company also posted a 24% drop in crude oil export sales last year.

The financial results at the end of 2020 leave the oil giant even more adrift, which is dragging a burden of a debt of 110,000 million dollars.

Pemex executives announced this Friday that on February 24 they received 32,000 million pesos (1,529 million pesos) from the federal government.

These resources will be used to pay long-term debt repayments.

Last week the López Obrador Administration decreed a reduction in the tax burden of the oil company by up to 73,280 million pesos, about 3,586 million dollars.

The Executive also establishes a decrease in the rate on shared utility rights - the most important tax paid by the company - which goes from 58% to 54% for the rest of 2021.

The transfer of resources from the federal government to the oil company is aligned with the discourse of "energy sovereignty" that Andrés Manuel López Obrador has promoted from the first day of his administration.

Despite the operational debacle of both state companies, the president of Mexico continues to support an energy reform that would once again give priority in the market to Pemex and the CFE, to the detriment of private companies.

In the conference before investors, the director of Pemex reported that an increase in production was achieved at the end of 2020 with an average of one million 705,000 barrels per day, which represents an increase of four thousand barrels per day in relation to the average annual production of the year 2019. In addition, a reduction in the cost of extraction of crude oil that went from 14.06 dollars per barrel in 2019 to 11.15 dollars per barrel for the year 2020.

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