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Mexico Budget Plans to Include $6 Billion Support for Pemex Debt
- Budget to cover part of debt due in 2025 amid ongoing support
- Pemex last year had received about $8 billion in the budget
Pemex freight cars outside the Francisco I. Madero oil refinery in Ciudad Madero, Tamaulipas state, Mexico, on Tuesday, July 9, 2024.
Photographer: Mauricio Palos/Bloomberg
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By Michael O'Boyle, Scott Squires, and Amy Stillman
13 novembre 2024 at 00:04 CET
Mexico plans to set aside about $6 billion for state oil company Petroleos Mexicanos in its 2025 draft budget, people familiar with the matter said, as the government signals continued support for the indebted oil producer.
The budget will include support for Pemex’s debt obligations next year, said the people, who asked not to be identified revealing details of the proposal that’s scheduled to be released on Nov. 15. The company has around $9 billion in debt coming due next year and roughly $13 billion in 2026, when maturities will peak.
The finance ministry is also planning to simplify the company’s tax structure, which currently includes three different types of dues, in order to to streamline its tax regime and help shore up the company’s fiscal accounts, one of the people said.
President Claudia Sheinbaum has said her administration would continue her predecessor’s policy of granting state support to Pemex. The capital injection gives some respite to investors worried about Pemex’s $97.3 billion debt burden.
Mexico’s finance ministry didn’t immediately reply to a request for comment.
Pemex Faces Its Largest Debt Maturities in the Next Three Years
Government has said financial support will continue in 2025Source: Pemex 3Q24 Company Presentation
Note: Data does not include revolving credits or other liabilities
Investors are betting government support to cover those maturities will continue. Pemex bonds jumped late last month after the company said it was working on a liability management plan that would be published after the government unveils its 2025 budget.
During her campaign, Sheinbaum suggested Mexico could refinance Pemex’s maturing bonds.
Read More: Pemex Bonds Jump on Expectations of Boost From Mexico Budget
Former President Andres Manuel Lopez Obrador supported Pemex with roughly $80 billion over the course of his term via capital injections and tax breaks. Lopez Obrador said in his final month before leaving office that continuing cash injections to the company was in the national interest.
Pemex received about $8.2 billion in last year’s budget to support debt payments, and the government slashed the company’s main duty to 30%. Authorities have also been allowing Pemex to defer
its tax payments.
Sheinbaum and her energy team are expected to release additional details on plans for Pemex at a Wednesday press conference.
