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Pemex's & Subsidiary Companies Presents its Business Plan 2019-2023

Gasoil News - Published on Fri, 19 Jul 2019

Image Source: pemex
In the presence of the president of Mexico, Mr Andrés Manuel López Obrador, the CEO of Petróleos Mexicanos, Mr Octavio Romero Oropeza, presented Pemex’s Business Plan for the years 2019-2023. It was unanimously approved by the Board of Directors and lays the foundations for the modernization of the company, making it more competitive and guaranteeing its long-term financial viability. This consolidates Pemex as an engine of national development and guarantor of energy sovereignty.

During the morning conference at the National Palace, the president of Mexico, Andrés Manuel López Obrador, supported the plan and stated that it is a rescue of the country's energy industry, after the resounding failure of the Energy Reform. He reiterated the support of the Government of Mexico for Petróleos Mexicanos, stating a gradual reduction of its fiscal burden, in such a way that it alleviates the necessary resources to invest in new projects in order to increase oil production.

The head of Pemex emphasized that the plan establishes the measures to face the main structural problems facing the company: the high tax burden, its debt and low investment, all of which are difficulties that trapped the company in a vicious circle.

Mr Romero Oropeza said that the strategy and measures adopted through the Business Plan, the company will achieve a balanced budget in 2021 and is expected to increase production to levels of 2 million 697 thousand barrels a day in the last year of the present administration.

In the document, he expressed that “Pemex makes clear its openness to business schemes with the private sector, under strict observance of the company’s interests, and with fair and transparent agreements, leaving behind the practices in which Pemex participated at a disadvantage”.

This Business Plan, said the CEO of Pemex, demonstrates a different management model based on innovation, efficiency and, above all, without corruption, is possible. He assured that, with the support of the Government of Mexico, Pemex will have relief in its tax burden, which will allow it to free resources to trigger investment projects in oil production. It should be noted that, as a first measure, for 2019, the fiscal benefit in the payment of oil production rights was extended through the publication of a decree that resulted in a benefit of around 30 billion pesos for this year.

Diagnosis

While reviewing the company’s recent performance, Mr Romero Oropeza, recalled that in the last 14 years there was a considerable drop in oil production, as a result of decrease in investment. He highlighted that in the last five years, the average reduction in production was almost 600 thousand barrels daily. He went on to mention that, like the case of upstream activities, investment in refineries as well registered significant decreases in recent years. This lack of investment even affected the availability of funds for maintenance, causing the fall of the processing levels of the National Refining System, bringing refined production to historical lows.

At the same time, Mr Romero Oropeza said, Pemex's debt increased considerably, only from 2013 to 2016, Pemex's debt doubled, from just over 1 trillion to more than 2 trillion pesos, causing the company to record financial deficits for the last ten years.

Investment

Mr Romero Oropeza, said that to increase the production of oil and gas, one of the fundamental cornerstones of the Business Plan is to accelerate the development of newly discovered reservoirs, as well as increasing the development activity in fields currently in operation, with new wells and with major repairs.

At the same time, he said that the plan foresees a gradual recovery of refining capacity based on larger amounts of investment destined for the rehabilitation of the six refineries and the development of the new Dos Bocas refinery.

Mr Romero Oropeza said that the goal is for Pemex to have resources to invest, which will allow the company at the beginning of next year, to increase its production levels throughout its value chain, generating the resources necessary to improve its financial balance.

Source :

Posted By : Ratan Singh on Fri, 19 Jul 2019
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