They see risks for Pemex in the short term -Reforme – 07/24/2018

The new energy program proposed by Mexico's new administration presents credit risks for Pemex due to its new focus on fuel self-sufficiency, said Moody's Investors Service in a new report. Fuel, direct investments to build or upgrade refineries and potentially delay oil and gas auctions add uncertainty as to whether Pemex can continue to benefit from favorable oil prices and the appetite of oil. 39, solid investment of foreign companies. and Pemex's credit quality has improved slowly since 2016, after making significant adjustments to its operating and investing expenses, "said Nymia Almeida, Vice President of Moody & ############################################################# 39; s

. that the sector was open to foreign investment in 2014, and closed its first field in 2016, the rating agency said.

Moody's said the biggest financial risk for Pemex involves building new refineries, assuming the oil company would be responsible for its construction and ownership. Apparently, the new administration plans to build two refineries with a production capacity of 300,000 barrels per day each, a refinery twice as large for a total of $ 6 billion.

However, he pointed out that cost overruns are common and new refineries may end up costing multiple initial budgets.

"If the refinery's plans come into effect, which is not fully confirmed, it would weaken Pemex's credit parameters to finance this investment. Almeida said:

Another risk to Pemex's finances stems from the fact that the new administration will control fuel prices. . Crude prices rose and the lowest weight increased fuel production. The company buys crude in US dollars, no matter whether it is produced or imported. Currently, taxes represent about 30% of the price of fuel at the pump.

The new administration could adjust taxes to maintain price stability, but changes in fuel prices according to inflation pose The third risk, he says, concerns foreign associations and if Pemex will have the ability to continue to do so.

Until March, Pemex had more than $ 106 billion. in debt with retirement obligations of 64 billion. In addition, it bears a high tax burden, in the order of 70% of its Ebitda, which limits its investment capacity.