Big-oil bailout already under way.
These days, the trend is not Pemex’s friend. Mexico’s loss-leading, debt-swamped, state-owned oil giant company announced that in July it had imported 554,000 barrels of oil a day — its highest monthly volume of imports since public records began in 1990.
In total, two-thirds of all the oil Mexico consumed in July was imported — a staggering statistic for a country that until not so long ago was home to one of the largest oil fields in the world, the Cantarell. Pemex also acknowledged that its crude production fell a further 5% in July while its natural gas production shrunk 9%.
The export figures were just as ugly. In 2011, when the price of Brent crude averaged over $100, Pemex’s export revenues hit a historic peak of $49 billion, a monthly average of $4.11 billion. In the first quarter of 2016 the monthly average was just $893 million. That’s a plunge of 78%.
As Pemex’s exports dwindle, Mexico’s imports of oil and gas continue to grow. Petroleum accounted for two-thirds of last year’s $14.5 billion trade deficit, which was the widest since 2008. During the same year, Pemex managed to rack up $38.5 billion in losses, its biggest ever.
If anything, the company’s decline is accelerating. This could be bad news not only for Mexico’s fiscally challenged government, which has grown comfortably dependent on the once bountiful proceeds from the oil business, but also for many of Mexico’s biggest banks, which have lent vast sums to the oil major and its huge network of suppliers. As Moody’s warns, if Pemex’s financial health continues to deteriorate, it could be a major source of risk for the banking sector in the months and years ahead…
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