The state-owned oil company used government support to pay off part of a large debt it had acquired due to the oil price slump
A view of Mexico's national oil company Pemex's refinery in Salamanca, in Guanajuato state, Mexico, February 8, 2016. Picture taken, February 8, 2016. REUTERS/Edgard Garrido, photo: Reuters/Edgard Garrido
16 of May 2016 13:54:47
MEXICO CITY — Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company, announced that it has made 92 billion pesos ($500 million) of payments to providers and contractors. Pemex also said that it has sufficient solvency to cover debts incurred last year for the next few months.[caption id="attachment_17680" align="alignright" width="300"] Pemex's Chief Financial Officer (CFO) Juan Pablo Newman gestures during an interview with Reuters at Pemex headquarters in Mexico City, Mexico, May 13, 2016. Photo: Reuters/Tomas Bravo[/caption]Pemex promised to fulfill its agreements with suppliers, contractors and workers in spite of the liquidity problems it faces due to the international slump in oil prices. The federal government supported Pemex during its liquidity crisis this year by supplying the state-owned company with vital lines of credit from the Treasury and Public Finance Secretariat (SHCP).The emergency credit was supplied on the condition that Pemex use it to normalize payments to contractors and providers, based on payment plans agreed upon with the providers.Pemex’s initial strategy was to prioritize payments to small and medium businesses, which represented 90 percent of total providers in 2015.The company indicated that the payments made to more than 2,900 providers and contractors contributed to the economic reactivation of oil-producing regions that had been negatively affected by the oil crisis.It said that it would also work with large businesses to normalize payment.At the end of 2015, Pemex’s total debt was 147 billion pesos. After the current payment, it only owes 55 billion pesos.The state-owned enterprise is close to paying off another 25 billion pesos of that debt, and the remaining 30 billion pesos of debt is still in administrative review processes.In the rest of 2016, Pemex will buy goods and services from contractors and providers only with its current budget.Through the debt payoff, Pemex is reinforcing its strategy of maintaining solid financial bases that allow it to continue strengthening itself while maintaining a debt level consistent with its operations.