Pemex seeks Goldman Sachs and JP Morgan to obtain 1,000 million dollars in credit

Petróleos Mexicanos needs capital.

The state oil company has knocked on the door of Goldman Sachs and JP Morgan to obtain financing of at least 1,000 million dollars.

According to

, the agreement with Goldman Sachs is related to crude oil, while with JP Morgan the parastatal seeks to close a deal that allows it to obtain cash tied to the sale of its gasoline.

The oil company's debt amounts to about 105,000 million dollars, of this amount, 20% corresponds to short-term debt and 80% are long-term liabilities.

Faced with the need for cash to cover outstanding payments for some 10,000 million dollars this year, the Mexican oil company has already resorted to the sale of bonds to refinance its debt.

However, in a restrictive environment, with high interest rates, the financing to be obtained is expected to be very expensive.

Although this newspaper sought out the oil company for more details, it did not receive a response.

The Mexican oil company's need for cash was evident earlier this year when it placed $2 billion in 10-year debt bonds, even though they had one of the highest yields of any security sold this year.

The rate of return offered by Pemex was 10.375%, close to twice the rate of return on a Mexican sovereign bond of the same term, which was then trading at 5.64%, and much higher than the rate of return offered by the same term. The oil company offered a bond in October 2020 when the yield was around 7%.

Since the beginning of this government, it has supported the state oil company to refloat its finances.

The federal Administration has transferred some 108,000 million pesos in capital contributions and although since last April Pemex has fully assumed the payment of its debt amortizations, the president has declared, without going into details, that the debt payments are guaranteed for this year.

"We have been supporting Pemex, we will continue to do so because it is the rescue of the most important public company in our country, it is one of the most important companies in the world in the oil sector," he said.

Fluvio Ruíz, former director of the oil company, explains that Pemex's search with the banks is complementary to the financial support it will receive from the Ministry of Finance, although he acknowledges that it will be expensive financing due to the current restrictive cycle.

“The general trend of interest rates suggests a higher financial cost and short-term loans are always very expensive.

At this time, surely, debt service will become more expensive, ”he comments.

The energy sector analyst refers that given this financial weakness it is urgent that the Government promote a tax reform in favor of the oil company and the Hydrocarbon Revenue Law.

Ruiz also warns that the country should evaluate the possibility that part of Pemex's debt be considered as sovereign debt: "It is a possibility that must be explored, it is an option that should not be ruled out," he concludes.

In December 2022, Pemex had the worst production in its history, reporting 1.5 million barrels per day, the lowest figure since statistical records were available, in 1984. In the third quarter of 2022, the oil company reported a loss net profit of 52,033 million pesos (about 2,584 million dollars) during the period from July to September 2022, a setback compared to net profits above 253,000 million pesos accumulated from January to June of last year.

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