Pemex Swings to $6 Billion Profit on Price Rally, Stable Output

The company saw profits rise to $6 billion, the highest in at least 18 years, as it benefited from the oil price rally and stabilizing crude output.

The state-run company reported a first-quarter gain of over 6 billion dollars, the highest since at least the first quarter of 2004. Pemex reported a net loss of 194.5 billion pesos in the fourth quarter, compared to a loss of 37.3 billion pesos a year ago.

Oil and condensate output increased in the first quarter due to increased production in shallow-water and onshore fields. The increase in output was 2.3% compared to a year ago.

The Mexican government subsidizes imported fuel to avoid higher prices for consumers, which has offset the benefits of higher energy prices.

President Lopez Obrador wants to make Mexico self-sufficient in gasoline and diesel by increasing Pemex's crude processing. Mexico plans to stop exporting crude in order to have enough to make fuel.

The Finance Minister said in April that the government stopped paying off debt due to the oil price rally. The Dos Bocas refinery in the state of Tabasco and the Deer Park facility in Houston were purchased by the company a year ago, and they are now part of the national refining system.

Pemex bonds hit a new low.

The president of Mexico has promised to return Pemex to its former glory by reducing the involvement of private companies in the oil sector. He canceled competitive oil auctions, ended farm-out, or joint-venture opportunities, and granted the state oil giant operatorship of the billion-barrel Zama oil field, which was discovered in 2017:

In the oil industry, the costs and risks are notoriously high, but Pemex takes on the sole financial burden of developing large swathes of Mexico's oil territory. Pemex must invest in its loss-making refineries to meet the government's energy self-sufficiency goal.