PEMEX, It's Numbers and Finances

Petroleos Mexicanos, a parastatal company present in several states in Mexico, is dedicated to the proper exploration, exploitation, refining and sale of Mexico's energetic resources. The company was established by a presidential decree on 1938 and possesses diverse extraction fields on national territory, including national waters.

Presently the General Director is Juan José Suárez Coppel, who reports directly to the Government’s Energy Secretariat. In 2006 PEMEX suffered a tax scheme change, which modified its income nature.
The company operates by means of a corporation which manages 4 main areas:

1. PEMEX EXPLORATION AND PRODUCTION
2. PEMEX REFINING
3. PEMEX GAS AND BASIC PETROCHEMICAL
4. PEMEX PETROCHEMICAL

The interstate company reports an annual income of more than 100 billion dollars, but these are insufficient to keep the company on positive numbers, mainly because it redistributes many of this benefits to maintain federal finances.

The main oil producing states are, in descending order, Campeche, Tabasco, Veracruz and Tamaulipas. By the end of 2009, the company’s work force consisted of a total of 145,146 laborers, being the area of exploitation and production the most populated with 50,544 employees.

Finances

-Amongst PEMEX income, we can list:

-Taxes: the IEPS (Special Tax on Production and Services), and the Tax on oil yield.

-General Rights (Unique right, right for the scientific research fund; right for fiscal monitoring of oil, on hydrocarbons, etc.)

-Benefits of exceeding yield

-PEMEX income from its own operations.

The figures reported by the company (in their annual reports to the Powers of the Union) are from the year 2009. During this time, the parastatal had some negatives due to low production of major oil producing areas:

Total Sales - 1,089,921 Million Pesos
total Expenses - 100,509 Million Pesos
Net Yield - (-) 94,662

The numbers in negative is due to the fact that PEMEX finances a great part of the federal operations. This is so true that since nearly 2 decades, the company has contributed with a third part (with slight variations) to the resources of the public sector. As if this wasn’t enough, years ago the company was allowed to keep only the 30% of the proceeds obtained from the sale of oil; this condition generated an increase on liabilities, mainly because the operative expenses of this parastatal company needed more than this percentage. To counter this deficit, some company stock certificates were extended. The company has 140 billion dollars authorized in the form of these certificates.

Talking about the total production, even when it is low, it allows Mexico to be the eighth world's largest country in oil production. Only in that year, Mexico produced 2,601.5 thousand barrels daily, producing more than half of the oil known as 'heavy', while in 2010 there were 2 million 850 thousand barrels produced per day.

Comparing this data with last year’s, it reveals a 6.8% drop on production. On the topic of natural gas, PEMEX reports an increase, reaching and exceeding slightly the 7000 million cubic feet production daily.

Even with those numbers, the oil related income is distributed as 14% for the states, 3% for the districts and almost 70% for the federal government.

A Dying Company?

One of the aspects that have to be highlighted is that due to the deficit of Petroleos Mexicanos (it being an important source of income in Mexico) there’s a huge need of investment if we want PEMEX to have healthier finances and perform at its best.

The company has served as a political spoil by malicious people that have prevented the proper investment on it. On recent times, several financial analysts agree in that the company has to allow capital inflows in order to overcome its liabilities and make structural reforms, or otherwise the company will sink.

I´ll take the case of PEMEX petrochemical in order to explain the status of the company’s finances. This department has had to import an increasing amount of resources to work (in 2009 there were more than 20 billion dollars) and its contribution to gross domestic product keeps going down (it's now less than 28% of its original amount); this makes it urgent to reorganize its operations, and demands a wider participation of PEMEX on the energetic industry in general, this way the company will grow stronger.

Its reserves are suffering too, which is why is so urgent to start searching for new oil deposits (during 2008 there was a popular campaign about the “exploration in deep waters”). Nevertheless, with the actual budget cuts it’s impossible to do this, and the problem turns worse when we consider what it has been said: the neighbor states may start to use the “straw effect” to steal Mexico’s marine reserves.



Artículo Producido por el Equipo Editorial Explorando México.
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