Mexico’s government-owned oil company says it minimized fuel theft 79% during the first quarter, but oil production reduced and money loss continued. Tuesday’s results shown on the stock exchange indicate a net loss of 1.84 billion dollars (35.7 billion pesos) in the January-March period. This figure is a 10.4 percent reduction compared to the previous quarter that managed 397.4 billion pesos. The company known as Pemex had undergone earlier years of decline before President Andres Manuel Lopez Obrador committed to restoring the profits. The first quarter of 2018, it managed to record a gain of 113.3 billion pesos.
Pemex Outstanding Debt is a Concern
Rating bureaus have advised that Pemex, which had a liability of 106 billion dollars as at the end of 2018, is on a risk of having its credit rating for investment grade decline to zero. Damage of the investment grade score would be a major setback to the management of Lopez Obrador, a politician who started operating in December. The company said it had cut its financial liability by 0.9 percent in the January –March period compared to the end of 2018. Nevertheless, the peso has improved against the dollar since then, and the liability now stands at 106.5 billion dollars.
Cruse Output has Gradually Declined
The production of crude was 1.66 billion barrels daily, a decline of about twelve percent from 2018 first quarter. Production is currently half what it was when output topped at 3.4 million bpd in 2004. Pemex directors told a conference call that they anticipated production to increase to an average of 1.725 million bpd in 2019. Nonetheless, the firm has made a discouraging start this year, decreasing by 0.2 percent for every quarter according to preliminary information. Lopez Obrador intends to reverse the shrinkage in production and get crude output back to around 2.5 million bpd before he’s about to leave the office at the end of 2024.