The Ministry of Finance and Public Credit (SHCP) reported that, after a refinancing operation, it was possible to reduce the debt of Petróleos Mexicanos (Pemex), as well as its financial pressure.
The completed operation was the one that was announced since last December, and had a contribution from the government of 3.5 billion dollars to promote the refinancing of the short-term maturities of the oil company.
To do this, bonds maturing in the short term were exchanged for a new 10-year bond, in addition to repurchasing bonds that were at a lower price and maturing in the medium term.
“Pemex’s refinancing process was a complete success. The confidence of the markets was confirmed in the financial strengthening strategy of our state oil company, which we are carrying out jointly with the Treasury and Pemex, ”Rogelio Ramírez de la O, Secretary of the Treasury, published on social networks.
According to the agency, the operation allowed the oil company to reduce its debt by 3,200 million dollars, as well as 10,500 million less in its financial pressure.
“This transaction made it possible to reduce the financial cost of the public sector and Pemex’s market debt. Thus, the debt of the state-owned company decreased by 3,200 million dollars and reduced its financial pressure, between 2024 and 2030, by 10,500 million dollars, ”explained the SHCP. In addition, it was possible to compress the rate differential paid by the state productive company over the sovereign rate by 50 basis points, thereby achieving a reduction of 189 million dollars per year in the financial cost.
“The federal government resources used in this operation do not put the execution of public spending at risk or imply any budget cut. The instruction of the President of Mexico is to support the oil company, which belongs to all Mexicans, and at the same time maintain healthy public finances and controlled public debt, ”the Treasury concluded.
As of September 30, 2021 -according to its latest quarterly report- Pemex’s financial debt reached an amount of 113,044 million dollars, 4.9% higher in its year-on-year comparison and a record for a third quarter. This implies that the debt of the state company would have fallen just to less than 110,000 million dollars.
Through its operation, Pemex provided dollar bondholders the option to exchange bonds maturing between 2024 and 2030 for a combination of a new 10-year bond and cash, and offered to buy back bonds maturing between 2044 and 2060.
Hand in hand with this plan, the state oil company rethought its business model, which from this year will be more focused on transformation activities and the commercialization of fuels in the national market.
By 2022, Pemex plans to reduce its crude oil exports by 57.3% to 435,000 barrels per day and increase its oil process by 111% to 1.5 million barrels per day, thanks to the incorporation of the Deer Park refinery, in Texas, and of Dos Bocas to its refining plant.
This would imply raising gasoline production by 119% to 517,000 barrels per day and diesel production by 140% to 293,000 barrels per day.
In the medium term, Pemex plans to increase its use of refining capacity to 85.9% from 44.9% in 2021. (with information from Octavio Amador)