Exports fall hits Pemex profits
Mexican state-owned oil monopoly Pemex's net profit fell 56% in the second quarter from a year earlier as crude exports declined and fuel import costs soared, the company said today.
Pemex posted a quarterly net profit of 16.7 billion pesos ($1.6 billion), down from 38.3 billion pesos a year earlier.
Pemex, a major US oil supplier which provides Mexico's government with more than a third of its fiscal income, said crude exports averaged 1.41 million barrels per day in the second quarter, down 18.3% from a year earlier.
A big jump in the average export price for Mexican oil to $104.10 per barrel from $56.90 a year earlier helped push up Pemex's overall second-quarter revenues by 29.6% to 371.6 billion pesos.
But the state-controlled company, which has to import 40% of Mexico's gasoline requirements due to a refining shortfall, said it spent an extra 27 billion pesos in the quarter on fuel imports.
Pemex is battling with declining yields at its aging Cantarell oil field, where output is now 1 million bpd, half what the offshore field was producing at its peak in 2004.
Pemex's overall oil output fell 11% in the second quarter to average 2.801 million bpd, well below the company's medium-term target of 3 million bpd.
As falling output curbs what it can export, Mexico is also having to ship a chunk of its crude to foreign refineries and then import back refined fuel at high cost amid a lack of money to build new refineries at home.
Mexico's conservative government is negotiating with centrists in the divided Congress to try and push through an oil sector reform within the next few weeks that could use more private sector contracts in exploration and production to try and restore the country's flagging production and reserves.
The reform would also seek to bolster domestic refining capacity and save the country billions of dollars a year.
Pemex, for years used as a cash cow and left with too little of its earnings to invest in exploration, has already benefited from an easing of its historically hefty tax bill.
One of the world's most indebted oil companies, Pemex said its total long-term debt stood at $40.7 billion at the end of June, while net debt, which subtracts cash equivalents, was $37 billion.
Pemex executives are due to discuss the results in a conference call with investors on Wednesday, Reuters reported.