Mexico's Pemex posts wider third-quarter loss, hit by weaker peso
- Pemex's net loss widens despite continuing government support
- Says has received 145 B pesos from state coffers in 3Q
- Revenue down nearly 8% year-on-year
- New President Sheinbaum pledged continued support
Mexican state-owned oil company Pemex reported a deeper $8.2-B 3Q net loss on Tuesday, hurt mostly by a weaker exchange rate even as it benefited from support from the country's new government.
The company, in a filing with the Mexican stock exchange, posted a loss of around $4.5 B in 3Q 2023, but Mexico's peso currency weakened more than 13% in the year since, according to LSEG data.
While Pemex mostly operates in U.S. dollars, like nearly all oil companies, it uses pesos for most of its local costs.
Revenue for the country's biggest company during the July-to-September period totaled 426 B pesos, down by nearly 8% year-over-year due in large part to lower crude oil export sales.
In recent years, Pemex has sought to reduce its crude oil exports while prioritizing refining. But it has mostly failed to reduce foreign motor fuel purchases in line with government targets, with gasoline and diesel import volumes consistently higher than Pemex's own output.
During the third quarter, it processed 962,000 bpd of crude, up by nearly a quarter compared to the year-ago period.
The quarterly performance of its refining unit yielded 278,000 bpd of gasoline and 186,000 bpd of diesel, the filing showed.
Pemex noted that its financial debt for the three-month period totaled $97.3 B, down by almost $9 B compared with the end of 2023, according to the filing.
Crude and condensate output down. President Claudia Sheinbaum took office at the start of this month, mostly pledging to continue generous government support for the heavily-indebted Pemex, much like her predecessor.
In its filing, Pemex said it had received 145 B pesos in assistance from state coffers during the third quarter.
Some close to Sheinbaum have suggested she might be more open to some form of Pemex partnerships with private oil companies in a push to boost production despite the company's massive debt load.
The new president has said she would target what she has described as sustainable oil output of 1.8 MMbpd.
In its report, Pemex reported combined crude and condensate production during the quarter of 1.76 MMbpd, down about 6% compared with the year-ago period.
Over the years, the company has seen its crude output fall steadily from a peak of 3.4 MMbpd two decades ago, sliding in recent months to fresh record lows under 1.5 MMbpd.
Earlier this month, Pemex faced lawsuits stemming from a toxic hydrogen sulfide release at its Deer Park, Texas, refinery in which two contractors were killed and nearly three dozen others injured. The deadly incident could lead to significant payouts.
On a call with analysts following the quarterly report, executives said investigations into the cause of the accident were ongoing while also minimizing its impact on the facility's operations.
According to its previous quarterly filing, Pemex also upwardly revised its second-quarter loss by about 7%, from a 255.9 B peso loss to 273.3 B peso loss during the April to June period. That added more than $950 MM to losses, according to calculations based on that quarter's exchange rate.
($1 = 19.6921 Mexican pesos at end-September)
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