Mexican state oil firm Pemex reports $23 billion loss in 2020

Mexican state oil firm Pemex reports $23 billion loss in 2020

Mexico City: Mexican state energy giant Pemex on Friday reported a loss of around $23 billion in 2020 as it grappled with a slump in oil demand caused by the coronavirus pandemic.

The company said it had faced “the worst crisis in its history” last year due to the health crisis sweeping the planet.

It blamed “the unprecedented combination of low prices for crude oil and petroleum products” and “a steep fall in fuel consumption that eroded the cash flows of all oil companies.”

Pemex announced an annual loss of 481.0 billion pesos, an increase of 38 percent compared with 2019, despite returning to profit in the second half of the year.

Revenue slid 32 percent to 953.7 billion pesos.

Pemex joins oil firms worldwide that suffered massive losses as the Covid-19 pandemic grounded passenger jets, sparked an economic slump and caused oil prices to briefly turn negative for the first time.

For the fourth quarter of 2020, the group posted a profit of 124.2 billion pesos ($5.9 billion), helped by favorable currency movements, tax breaks and gains on financial instruments, it said.

That compared with a loss of 171.5 billion pesos in the same period of the previous year.

Pemex, which returned to the black in the three months to September, said it was the first time in more than four years that it had posted two consecutive quarterly profits.

Leftist President Andres Manuel Lopez Obrador has sought to help the firm regain its footing with a series of cash injections and other measures following years of declining production.

The company said that in 2020 it had achieved a “small but very significant increase” in oil production, which stood at around 1.7 million barrels per day on average.

Pemex said its debt rose to $113.2 billion, an increase of 13.9 percent from the end of 2019.

Rating agencies Fitch and Moody’s have downgraded the company’s credit rating to junk status due to its vulnerability in the face of low oil prices and its need for greater government support.

Mexico, a country of 126 million people, has registered almost 184,000 known coronavirus deaths — the world’s third-highest toll.

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Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.