Mexican finance ministry says fully behind Pemex on debt payments

Vehicles are seen next to fuel pumps at company Petroleos Mexicanos (PEMEX) in a service station after Mexico suspended a week of gasoline subsidy along the U.S. border, in Ciudad Juarez, Mexico April 2, 2022. REUTERS/Jose Luis Gonzalez

MEXICO CITY, April 28 (Reuters) – The Mexican government is ready to make Petroleos Mexicanos’ (Pemex) debt repayments whenever necessary, though higher oil prices have greatly improved the state oil firm’s cash flow, Finance Minister Rogelio Ramirez de la O said on Thursday.

Responding to a Reuters report last week that Pemex was under pressure to resume financial debt repayments after the government had previously said it would pay them until 2024, Ramirez said it was important markets understood his ministry was fully committed to supporting the firm. read more

“The finance ministry will always be behind Pemex’s amortizations,” he told Reuters, while adding that if the company had the means to service its debt, it would do so.

“If Pemex has cash flow in this quarter, this month, or whatever, Pemex can make its own payments.”

Reviving the fortunes of Pemex, which had financial debts of $109 billion at the close of 2021, is one of President Andres Manuel Lopez Obrador’s top priorities.

Revenues at the company have been hit by years of declining oil production. Production has now stabilized.

Ramirez underlined that a jump in international crude prices, which has taken place since Russian forces invaded Ukraine in February, had eased pressure on Pemex’s liquidity, and greatly improved its cashflow in the current quarter.

“We’re in an environment in which Pemex’s situation has changed, he said. “And in this new situation if Pemex has the cashflow to pay off an amortization, or several itself, or half of one or half of several … it will do so.”

“And the finance ministry will continue to answer for everything if it becomes necessary, or part of them, if necessary.”

Reporting by Dave Graham
Editing by Alexandra Hudson

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