The Treasury Secretariat (SHCP) announced that it will allocate 73.5 billion pesos ($4.2 billion) to strengthen the financial situation of the Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company.
The Treasury will immediately supply Pemex with 26.5 billion pesos to protect the finances and liquidity of the state-owned company. The remaining 47 billion pesos will be used to pay pensions and retirement benefits to workers during 2016.
The SHCP stressed that the bailout is conditional, and that Pemex must reduce its current liabilities and its debts to providers and contractors by the same amount that the government is providing it with. In addition, any current liabilities that Pemex has at the end of 2016 must have been generated in that year, and current liabilities must be kept at sustainable levels in the future.
For Carlos Serrano, chief economist for BBVA Bancomer, the bailout of Pemex is a good measure to make the business more competitive, or at least to solve the liquidity problem on the short term.
“This is a good measure, it’s not going to fix Pemex’s finances, which are very complicated, but it will help Pemex face its liabilities for the rest of the year, financial liabilities with providers, which is an important issue,” he said.
However, Serrano made clear that Pemex must also take other actions to fix its financial problems.
“This is a good measure, first because it will help with Pemex’s liquidity problems, and second because it doesn’t compromise public finances, butat the same time, it is important for Pemex to take additional measures to improve its situation,” said Serrano. “The bailout won’t fix Pemex’s structural problems, it needs to take other measures, it needs to sell shares, it needs to associate itself more with the private sector and make itself more efficient.”