Oil Downturn 'Huge Blow' to Mexico, Says Energy Minister Coldwell David Hunn - My San Antonio
go to original September 23, 2016

Pedro Joaquin Coldwell, Mexico’s energy minister, speaks during last year’s IHS CERAWeek conference in Houston (F. Carter Smith/Bloomberg)

The Mexican secretary of energy said on Friday that the finances of the country’s national oil company have “taken a huge blow” during the oil downturn.

Pedro Joaquin Coldwell, speaking to energy executives, attorneys and academics at Rice University on Friday, said that Petróleos Mexicanos – known as Pemex – gathered overwhelming debt loads in recent years and has since accumulated “huge losses” during the oil price downturn.

“Pemex finances are really suffering,” Coldwell said. “They’ve taken a huge blow.”

Unlike most integrated oil companies, such as Exxon and Chevron, Pemex didn’t benefit from both producing oil and refining it, as others have. Its refineries, Coldwell said, have been hampered by “deficient operations.”

Coldwell said that the sweeping, multi-year reform of Mexico’s energy sector, however, should help Pemex pull out of the doldrums. The government has rewritten sections of the Mexican constitution to give the country more flexibility in energy production, transportation, sales and regulation. The reform has already given Pemex the authority to renegotiate labor contracts. For instance, it owes more than $50 billion in accumulated retirement debt, Coldwell said, and has started renegotiating to lower payments.

Meanwhile, the government has injected millions of dollars into the company to keep it afloat, he said.

Read the rest at My San Antonio

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