Pemex Debt Expected to Drop $18.8 Billion in Third Quarter

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Mexico Finance Minister Edgar Amador recently told the Chamber of Deputies he expects Pemex's debt to drop to US$80 billion from US$98.8 billion by the third quarter.

"From 2008 to 2018, Pemex's debt rose 130%, from US$43 billion to US$105 billion. By quarter's end, we expect it to be US$80 billion--still significant, with much left to do," Amador said.

At the end of the second quarter of this year, Pemex had US$98.8 billion in debt, ranking it among the most indebted energy firms. Current and past governments have pledged to halt debt growth, helping reduce it from US$105.8 billion in fourth-quarter 2018.

Moody's projects Pemex's debt could drop to US$78 billion by the end 2027 if it avoids new borrowing. Earlier this September, Moody's upgraded Pemex's credit rating from B3 to B1 with a stable outlook.

Moreover, in July, Mexico placed US$12 billion in pre-capitalized funding to cover Pemex's obligations for this and next year, with the offer receiving significant demand of US$23.4 billion. This money was geared toward the payment of debt for 2025 and 2026.

In September, the government issued US$13.8 billion in U.S. dollars and euros to capitalize Pemex. Also, the company completed a US$12 billion bond buyback, including US$9.9 billion in notes maturing between 2026 and 2029.

President Claudia Sheinbaum's administration has pledged to maintain the energy company's output near 1.8 million barrels of oil per day (BBL/d) during her tenure.

However, in recent months, Pemex's output dropped from the 1.8 million-BBL/d mark and has been averaging 1.62 million BBL/d, with August standing at 1.64 million BBL/d.

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